January 21, 2021, by Jessy Bains
Canada Mortgage and Housing Corporation (CMHC) says house prices could fall 47.9% peak-to-trough with an unemployment rate of 25% in its worst case scenario.
CMHC says without government intervention, its solvency and capitalization would be in question. Even with help, the agency says prices would fall 31.8% and the unemployment rate would be 24.2%.
CMHC CEO Evan Siddall made headlines in May when he forecast a decline in average house prices of 9 to 18% in the coming 12 months, but that hasn’t panned out so far with record price appreciation in many markets.
“As we continue to deal with the impacts of the COVID-19 pandemic, it is important to monitor the evolving financial risks facing Canadian housing markets including an uneven economic recovery impacting most vulnerable populations,” said CMHC’s chief risk officer Nadine Leblanc, in a release.
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