P.E.I. housing will remain tight, says CMHC
Immigrants and a strong job market will continue to drive housing prices
The Canada Mortgage and Housing Corporation does not see any significant easing of the P.E.I. housing market before 2020.
CMHC released its Housing Market Outlook for Atlantic Canada on Tuesday.
The Crown corporation expects immigration and employment growth to continue, and that will drive the housing market.
"Resale home demand has grown swiftly in recent years, outpacing the number of new listings and drawing down the total number of active listings," says the report.
"This imbalance is expected to moderate somewhat over the forecast period as more new homes are built, but upward pressure on average resale prices will remain in 2019 and 2020."
This trend will be particularly strong in Charlottetown, where the large majority of immigrants are settling, according to the report.
The limited supply of resale homes and a tight rental market will continue to drive new housing starts, and that will include apartments. But CMHC expects immigrants and downsizing seniors will keep pressure on the rental sector.
"The Charlottetown area's rental market demand and supply imbalance will continue to hold vacancy rates low and steer rents higher," says the report.
The forecast vacancy rate for the end of 2018, at 1.0 per cent, is largely unchanged from last year's record low of 0.9 per cent. It is projected to rise to just 1.5 per cent in 2020. As recently as 2015 it was 4.2 per cent.