Cielo condos. Will house prices in Canada fall by 30%? One, from RBC Bank, said that the Canadian real estate market began trading sideways for a year in March 2022, and then prices were likely to fall by 30 per cent by April 2023.Please Visit: Cielo condos to Get Your VVIP Registration Today!
The other is a report from the Oxford Institute of Economics (Oxford Economics), which concludes that if Canadian house prices begin to fall in the fall of 2022, they could fall by 24% by 2024; if Canadian house prices do not fall or even continue to rise in 2022, Canadian house prices will fall by 40% by 2024.
RBC Bank predicts the housing market every once in a while, but the whole rhythm is inexplicable. Feel it:
At the end of 2020, RBC was bearish on the Canadian housing market and predicted that Canadian house prices would fall by 30%.
In January 2021, RBC changed his forecast for Canadian house prices to rise by 8%.
In May 2021, RBC judges that house prices in Canada will fall by as much as 30%.
In June 2021, RBC changed its tune again, announcing that house prices in Canada would rise by 13%.
In March 2022, RBC again predicted that house prices in Canada would fall by 30%.
Judging from the above-mentioned RBC bank’s judgment on the housing market between 2021 and 2022, house prices are expected to rise after they fall by 30 per cent. It may be because RBC has its own insistence that it will not turn around without a “drop of 30 per cent”. I wonder how RBC feels when he reviews his forecasts for the housing market every year.
At the beginning of the epidemic, the Oxford Institute for Economics (Oxford Economics) predicted that the Canadian real estate market would fall by 10%. Now it is amazing that when Canadian house prices are high, it is “down 24%, possibly up to 40%”.
At the same time, the Oxford Institute for Economics predicts that between 2025 and 2030, the Canadian property market may be oversupplied, house prices will fall, and the “housing affordability problem” will improve slightly in 2028.
The Oxford Institute of Economics predicts that house prices in Canada in 2028 will be almost the same as those in 2018. So does it mean that Canadian house prices can be solved when they return to “housing affordability” in 2018?
In fact, Canada’s “housing affordability” problem has grown with Canada all the way.
As a result, the Oxford Institute for Economics believes that it is a bit naive for Canadian house prices to fall to 2018 levels to solve the problem of “housing affordability”, which existed in 1990.
And the Oxford Institute for Economics data is not from Statistics Canada, so the forecast is flawed.
The following picture shows the ratio of household income required for Canadians to buy property from 1980 to 2020, according to a set of data from Statistics Canada. From the big arrows rising all the way, we can see that the problem of “housing affordability” has really been the same for 40 years.
If it falls by 30%, the turnover of the real estate market may fall off a cliff, and developers will burst into thunder one after another.
The decline of more than 30%, the real estate market may be full-blown thunderstorm, the financial crisis begins.
The broken ring of the financial crisis is not only aimed at housing enterprises, financial institutions, individuals, trees in front of the door are all spared. The impact of thunderstorms by financial institutions on the whole country is immeasurable. When banks do not have the money to lend to the real economy, it will eventually lead to the closure of enterprises, a large number of employees laid off, no one to repair the tree in front of the door, the whole society will be cold.
Therefore, many experts say that if house prices plummet, many people will not be able to afford to buy a house, in fact, it is not without reason.