House prices forecast to stay below 2021 peak through most of the 2030s

Even though house prices may eventually return to their nominal 2021 levels by mid-2029, inflation will have eroded the real value of those dollars.

Forecasts suggest that by the mid-2030s, homes will still be worth about 20% less in real (inflation-adjusted) terms than they were during the COVID boom.

Infometrics chief forecaster Gareth Kiernan says, “House price inflation is expected to average 3.1 percent a year over the next five years.”

While modest growth is projected, he warned that the recovery will be slower than after the global financial crisis. “We’re already three-and-a-half years into the cycle… if it takes another three-and-a-half years to get back to the peak, it’s a seven-year cycle.”

Kelvin Davidson of Cotality (formerly CoreLogic) said current values remain about 16 percent below their 2021 highs, and while some recovery is expected, it will be gradual. “At a 5 percent annual growth rate… it’s going to take about three years. But at 2 or 3 percent, it’s five or six.”

Davidson said higher stock listings, labour market jitters, and regulatory constraints like debt-to-income and loan-to-value rules are keeping buyers cautious.

“Some people might be disappointed, but people looking to buy are probably fairly happy,” he said.

Centrist Ltd.