South Forest Hill Residences for sale.Canadian house prices will fall by double digits next year. The credit rating giant has warned that the downturn in Canada’s real estate market will continue next year.Please Visit: South Forest Hill Residences for sale to Get Your VVIP Registration Today!
Fitch Ratings is the latest company to report a decline in Canadian real estate prices. Prices are expected to fall by 5% to 7% in 2023, nominally by 15% from peak to trough. Prices are expected to resume growth in 2024, but below average.
“continued rising interest rates, inflationary pressures, economic stagnation and declining affordability are expected to lead to lower demand by the first half of 2023, which will dampen demand,” said Susan Hosterman, senior director for North America at Fitch Ratings.
The decline was large, but much smaller than other companies had predicted. Hosterman attributed this to many positive factors in the Canadian property market. Supply imbalances, net immigration and rising rents are among the reasons. However, they warn that demand could be weak if the economy is hampered by measures to curb inflation.
When it comes to higher interest rates, Fitch warns that affordability has never been worse. Higher interest rates are a big problem because of astronomical house prices. They point out that “stubbornly high house prices” have not fallen substantially since the 1990s.
Canada’s mortgage delinquency rate will rise sharply in the coming months. Fitch Ratings forecasts a delinquency rate of 0.25% in 2023, 11 basis points higher than this year (bps). Considering that this means that mortgage delinquency rates have increased by more than 75%, the increase is very sharp.
Royal LePage Real Estate of Canada released its 2023 market survey forecast on December 13th. Phil Soper, the company’s president and chief executive, said at a news conference on the same day that low borrowing costs before March, rising household savings and the desire for more space during the pandemic had driven nearly two years of housing appreciation, but the inevitable decline had begun to correct the “crazy excessive housing market”.
The company expects Canadian house prices to level off in the second quarter of next year, fall 1 per cent by this time next year, and then rise by the end of the year.
Despite the economic slowdown, population growth caused by severe chronic housing shortages and record immigration levels has kept house prices high across the country, according to the forecast.
Vancouver will remain the most expensive market in Canada, with the average price of detached houses expected to fall 2%, from 1678100 yuan to 1644538 yuan, while apartments will jump from 739900 yuan to 747299 yuan.
According to a national survey of real estate agents, the real estate market will cool down as rising interest rates lead to higher mortgage costs for lenders, according to a new report from Re/Max Canada. Average house prices in Canada will fall 3.3% in 2023, with Ontario and British Columbia falling the most, with prices in some cities likely to fall by 10% to 15%.
Re/Max said it expected 60 per cent of Canada’s property market to be balanced by 2023 and expected greater price volatility in some markets. Durham in British Columbia (Kelowna) and Ontario is expected to fall by 10 per cent and Barrie by as much as 15 per cent.
House prices in the greater Toronto area are expected to fall by 11.8%, while those in the greater Vancouver area are expected to fall by 5%.
However, house prices are expected to rise in some major cities in Canada, including 7 per cent in Calgary, Canada, 3 per cent in Edmonton and 8 per cent in the new province of Halifax.