When CMHC predicts home price declines of up to 18%, buyers and sellers stop and take notice. That is exactly what happened in early June 2020. A recent forecast from CMHC of a potential decrease in home prices by up to 18% raised many questions.
This post was first published on June 6, 2020. The figures below are from that time.
Why CMHC predicts home price declines
First, people wanted to know what assumptions CMHC based its report on. They also asked what the market stats were really showing. And they wanted to understand the rationale behind the thought process, along with many more questions.
CMHC is the Canada Mortgage and Housing Corporation, a federal Crown corporation. Its forecasts look at the whole country. They also rest on assumptions about jobs, incomes and the economy. So when CMHC predicts home price changes, it gives a national scenario, not a promise for your street.
The forecast also created confusion in the minds of buyers and sellers alike. Many wondered about the future of the housing market in Canada, especially in the GTA. That confusion is normal. After all, a big headline number is hard to ignore.
It also helps to remember what a forecast is. It is a best guess built on a set of “what if” ideas. If those ideas change, the forecast changes too. That is why forecasters often give a range rather than one number. A range tells you how unsure the future really is.
What TRREB’s May 2020 numbers showed
Local data told a different story. Contrary to CMHC’s forecast, the latest housing market report from the Toronto Region Real Estate Board (TRREB) covered May 2020. It showed that the average sale price increased by 3%.
In other words, prices in the region were not falling at that moment. So while CMHC predicts home price drops for the country, the GTA’s own numbers pointed the other way. This gap is why it helps to read national forecasts next to local reports.
Of course, one month of data never settles the question. However, it does remind us that markets are local. A national average can hide very different trends in Mississauga, Toronto or Oakville.
When you read a monthly board report, look at more than one number. Check the number of sales, the new listings and how many days homes took to sell. Also compare the month with the same month a year earlier. Together, these clues show whether buyers or sellers have the upper hand.
Why RE/MAX called the forecast irresponsible
RE/MAX also pushed back. A blog written by RE/MAX challenged CMHC’s report and called it “irresponsible”. The blog said:
“the region has not experienced any decline in price and if current conditions continue, there’s nothing to indicate that prices will fall between nine and 18 percent, as CMHC has predicted.”
Notice the words “if current conditions continue”. Both sides were making a call about the future. Therefore, the honest answer is that nobody knew for sure. Still, when CMHC predicts home price falls and a brokerage disagrees, the best move for you is to look at the facts behind each view.
Also keep in mind who is speaking. A national agency, a bank and a brokerage each see the market from a different seat. None of them can see the future. So weigh each view, then check it against the homes that are actually selling near you.
What it means when CMHC predicts home price drops
So what should you do with a forecast like this? Here is some practical guidance that still applies today:
- Focus on your own plans. A move for family, work or space rarely fits neat market timing.
- Watch local numbers. Monthly board reports show what is really selling near you.
- Know your budget. Get a mortgage pre-approval so you know what you can afford.
- Think long term. Most people hold a home for many years, not a few months.
Likewise, sellers should price with care. A home priced to the current market sells more smoothly than one priced on hope or fear. Meanwhile, buyers can use uncertain times to negotiate calmly and do proper checks.
It also pays to talk to people who see the market every day. A real estate agent can pull recent sales on your street and explain what they mean. Then you can make a plan based on facts, not headlines. That approach works in a rising market and in a falling one.
For more on how people felt at the time, read which direction Toronto housing prices might go after COVID-19. You can also read why so many people worried about the market back then. Prices have moved a great deal since 2020. For a recent picture, see my post on GTA home prices in August 2026. And whenever CMHC predicts home price moves again, you will know how to read the news.
Sources and the full RE/MAX report
Follow the link for the full report:
Talk to a Mississauga real estate agent
Do you have questions about buying, selling or planning your next move? I am happy to help. You can reach me through my contact page or call me directly at 416 908 5600. A. Q. Mufti, Sales Representative, RE/MAX Real Estate Centre Inc., Brokerage.
Disclaimer: this article was published on 18 January 2025 and reflects the information available at that time. Interest rates, prices, and government programs change, so check the current position before acting on anything here. It is provided for information only and is not financial, mortgage, tax or legal advice. A. Q. Mufti is a registered Sales Representative with RE/MAX Real Estate Centre Inc., Brokerage, Ontario, Canada.
