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The latest two are from the Canadian Mortgage and Housing Corporation (CMHC) and Royal Bank of Canada (RBC). CMHC said home sales, house prices and start-up growth this year will all slow from their highs during the epidemic, but will remain high on the back of a strong economy, employment and immigration. In its latest forecast, RBC says house prices will peak this spring.
Royal Bank of Canada (RBC) cut its forecast for the property market this week in anticipation of a bigger rate hike in the future.
Robert Hogue, assistant chief economist at Royal Bank, said the Canadian real estate market was about to peak after a record rise.
The market is likely to peak this spring as the Bank of Canada’s rate-raising cycle puts the brakes on real estate activity, Hogue said in a report Thursday.
“We now expect resale activity to slow faster than previously expected,” he said. Perhaps more importantly, as market sentiment turns from extremely bullish to worsening, we expect house prices to peak this spring. ”
“in this changed situation, local markets are likely to experience a modest price correction, reversing the huge gains of the past year.”
Overall, national benchmark prices are likely to fall from peak to trough, falling by nearly 5 per cent every quarter, according to Hogue.
He estimates that home sales will fall 13 per cent this year and a further 14 per cent in 2023. Due to the strong growth at the beginning of this year, this will not lead to a decline in average house prices in 2022. Prices are expected to rise 8.1% this year and fall 2.2% by 2023.
Hogue also said that the decline in house prices is expected to be uneven geographically, with greater pressure on prices in markets such as Vancouver and Toronto.
Image source: PHOTO BY ASHLEY FRASER/POSTMEDIA.
On the other hand, Bob Dugan, chief economist of the Canadian Mortgage and Housing Corporation (CMHC), said in the outlook report: “Price growth will tend to be close to the long-term average in 2023 and 2024, and sales and start-up activities are expected to remain above the 5-year and 10-year average.”
“the price rise is likely to continue, dominated by markets with a low number of listed homes, including Vancouver, Toronto and Montreal.”
There are already signs that the market is showing signs of cooling.
Average house prices fell 2.5 per cent in March from February, while sales fell 5.4 per cent, according to data released by the Canadian Real Estate Association (Canadian Real Estate Association) on Tuesday.
Some predict that house prices will fall even more as the Bank of Canada (Bank of Canada) raises interest rates to cope with soaring inflation.
