“Question the motivation of anyone who wants you to believe prices will go up” – CMHC boss slams realtors

Canada Mortgage and Housing Corporation boss doesn’t mince his words when it comes to hitting back at realtors who’ve been critical of the national housing agency’s dire real estate market forecast.

“Some vocal real estate advisors have labelled us “panic-inducing and irresponsible,’ saying essentially that house prices don’t go down,” Evan Siddall said as the agency released its latest market outlook. “They’re whistling past the graveyard and offering no analysis. Here’s ours.”

CMHC’s Housing Market Outlook for Spring 2020 sees the home prices shrinking by up to 18%^[1]https://assets.cmhc-schl.gc.ca/sites/cmhc/data-research/publications-reports/housing-market-outlook/2020/housing-market-outlook-canada-spring-2020-en.pdf?rev=8fe54bb4-638a-48ba-8c3b-590663bc15db.

Earlier, real estate agency RE/MAX put out a press release accusing CMHC of creating “panic”.

“CMHC doesn’t seem to understand the sheer number of sellers that would have to accept this kind of price reduction, in order for average housing prices to plummet to this degree in such a short time span,” Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario Atlantic Canada said. “Sellers simply won’t accept that kind of discount on their listings. A statement of this nature is panic-inducing and irresponsible.”

Siddall pulled no punches when responding to the real estate industry’s accusations.

“Please question the motivation of anyone who wants you to believe prices will go up (yes, up) with our economy in slow motion, oil being given away, millions of Canadians on income support and a greater % of mortgages not being paid than we’ve seen since the Great Depression,” Siddall said.

The CMHC Market Report predicts a turbulen road ahead for the housing market.

“Canada will see a historic recession in 2020 with significant falls in indicators of the housing market,” it read. “This outcome reflects measures to contain the pandemic to protect
public health, and cutbacks in economic activity. The global reach of the pandemic lowered demand for oil, aggravating global excess supply, and resulted in falling oil
prices, which will exacerbate declines in the economies of Canada’s oil-producing provinces.”

The housing agency sees no recovery on the horizon.

“Following declines in 2020, housing starts, sales and prices are expected to start to recover by mid-2021 as the pandemic recedes,” the report adds. “Sales and prices are still likely to remain below their pre-COVID-19 levels by the end of 2022 (the forecast horizon). The precise timing and duration of the recovery is highly uncertain because the virus’s future path is not yet known.”