The quick takeaway from a new report by the Canada Mortgage and Housing Corporation is it's going to cost more whether you buy a home or rent.
The forecast looks at factors that will shape housing demand for the next two years, and despite government efforts to boost affordable housing, new home construction will only grow modestly between this year and 2025.
The skilled labour shortage will hold housing starts back. Not only are there not enough skilled labourers, but larger projects in the region, like the Gordie Howe International Bridge and the new acute care hospital, will increase competition for the ones we have.
There were 1,515 single-detached and multi-unit housing starts in 2022. The agency predicts a slight improvement this year, but most new projects will be multi-unit homes. It said Windsor can expect between 1,450 and 1,650 starts this year, as many as 1,700 next year, and 1,900 on the high end in 2025.
The CMHC also said high borrowing costs would push resale and prices down this year.
High borrowing costs could cool housing sales slightly this year before it picks up again in 2024 and 2025. The CMHC predicted 6,200 would sell this year, up to 6,900 next year, and 7,800 in 2025.
Fewer sales mean less upward pressure on prices, so those too will fall, possibly by 15 per cent this year, to an average of between $460,000 to $512,000. Last year, the average price to buy a home in Windsor-Essex was $602,809.
In 2024, average resale prices will rebound slightly to $560,000 on the high end of the prediction and $611,000 the following year.
The news is just as dire for those who rent. Thursday's report noted there are already bidding wars for rental units in the city as the rental vacancy rate fell to 1.8 per cent last year. Finding an apartment won't get easier in 2023 as the vacancy rate further declines to one per cent.
The same factors slowing housing construction appear to be at play in the rental market. With a shortage of new apartment units, demand for the few available has spiked, driving up rental prices. As shovels go in the ground to build more homes, single-detached and multi-unit, the vacancy rate should improve to 1.4 per cent next year and 2 per cent in 2025.
The cost of renting a two-bedroom apartment will continue to rise over the next two years, from $1,197 in 2022 to $1,350 in 2025.
The CMHC cautions its forecast depends on the assumption inflation will continue to abate in 2024 while the availability of skilled labourers improves.
