Canadian home prices could fall by 25% next year

Aug 12 2022, 8:03 pm

Good news for prospective homebuyers — Canadian home prices are about to take a swift nosedive, and you won’t want to miss out on a sweet deal.

According to a report published by Desjardins on Thursday, Canada’s housing market is correcting faster than previously expected. Nationally, average home prices could plummet by 20-25% compared to the exorbitant ones we saw back in February.

This change is expected to hit the real estate market between February and December of next year. After a few years of seeing the pandemic-induced price boom, this is surely a glimmer of hope.

That said, Desjardins says that prices will return to pre-pandemic levels nationally in each province as 2023 closes. High mortgage borrowing costs will still affect buyers’ decisions, and home sales — which are declining nationwide — might remain slow.

“We now expect the Bank of Canada’s policy interest rate to top out at 3.25% late this year,” said Desjardins. “However, weakness in the Canadian economy primarily attributable to the housing market downturn should prompt the Bank to begin cutting rates by the end of next year.”

Earlier this month, RBC released a report about the steep slope being observed in Canadian home prices. According to them, the decline will quickly become one of the sharpest drops in the last half century for Canada’s most unaffordable markets.

“Prices are sliding fast, and the exuberance that permeated these markets earlier this year is being replaced by fear,” said Robert Hogue, assistant chief economist at RBC. “[Toronto and Vancouver] are most at risk in light of their excessively stretched affordability and outsized price gains during the pandemic.”

Experts at Desjardins believe the adjustment will help to “bring some sanity back to Canadian real estate.”

Let’s hope they’re right.

With files from Zoe Demarco

GET MORE URBANIZED NEWS
Want to stay in the loop with more Daily Hive content and News in your area? Check out all of our Newsletters here.
Buzz Connected Media Inc. #400 – 1008 Homer Street, Vancouver, B.C. V6B 2X1 [email protected] View Rules
National Trending StaffNational Trending Staff

+ News
+ Real Estate
+ Canada
+ Urbanized
ADVERTISEMENT