Canada Mortgage and Housing Corporation President and CEO Evan Siddall is warning the domestic housing market isn’t out of the woods just yet.

In an interview with BNN Bloomberg’s Amanda Lang broadcast Thursday, Siddall said that while the most bearish case for home prices doesn’t seem likely to come to pass, he still sees a price decline by just shy of 10 per cent due to the economic shocks of the COVID-19 pandemic.

“The number of people on income support, the number of people on mortgage deferral, means that at some point, probably early next year through the middle part of next year, there will probably be a negative adjustment in house prices,” he said. “In general, we think high single-digit [percentage] negative adjustment is what we can expect in most markets.”

The CMHC had released a forecast in May warning average home prices in the country could plunge as much as 18 per cent in a worst-case scenario due to the pandemic and its impact on economic growth, employment and lost income.

Siddall told BNN Bloomberg various income-support measures implemented by the federal government has helped the Canadian housing market avoid that worst-case scenario.

“This is very much a path-dependent forecast. That was a ‘the pandemic was going to be horrible, deep,’ and it’s been pretty bad, but government income support, government fiscal support, government monetary policy support have helped alleviate some of those pressures,” he said.

However, Siddall warned that the looming reduction of federal support will lead to higher unemployment and further lost income, deflating home prices.

“Ultimately, what it does is it requires economic adjustment and in some businesses, there will be unemployment that results,” he said. “And unemployment is the kind of thing that drives prices lower.”