Festival condos.Canadian house prices may plummet by 30%! If there are no unexpected fluctuations in the economy, house prices will fall slightly next year, according to a forecast from the Royal Bank of Canada (RBC).Please Visit: Festival condos to Get Your VVIP Registration Today!
But as the economic outlook darkens, economic experts at RBC warn that there is a strong possibility of an economic downturn in the future, which will cause house prices to fall by as much as 30 per cent. If that happens, it will mean that almost all gains since 2020 will fall.
In the face of possible economic risks, the authoritative prediction of financial institutions is essential, which will play a positive role in correctly planning risk prevention and control measures.
Economic operation is generally divided into three situations: basic stability, economic upward and economic downward.
Economic forecasts are only a microcosm of the current economic situation and cannot cope with possible changes. Once the economic situation deviates from the track, these forecast indicators will help the government to formulate corresponding macro-control policies.
On the other hand, the significance of economic forecasting for macroeconomic regulation and control lies in industry profits. If the forecast is too negative and pessimistic, enterprises will develop conservatively and may face the risk of underexposure of brands or underperformance of their peers. If the forecast is too positive and optimistic, lenders will be exposed to risk and may suffer huge losses.
In the current economic situation, if we maintain steady development, house prices will fall first and then rebound. The benchmark average price of comprehensive housing in Canada is expected to decline by 3.6 per cent annually by April 2023, with a compound annual growth rate of 4.3 per cent over the next four years. House prices will rise by 14.1% in the five years to April 2027.
For example, based on the current benchmark average price of housing, the benchmark average price of a home will fall to 850600 (- $31800) by April 2023. By April 2027, the price of the house will rise to 1.0067 million (+ $124300).
“while we all hope for positive economic growth in the future, based on current projections, the likelihood of an economic downturn is increasing,” said Graeme Hepworth, chief risk officer at RBC.
If the economy goes down, there may be a sharp contraction similar to that in the 1990s, requiring long-term macro correction.
By April 2023, the average benchmark price of a home is expected to fall for 12 consecutive months to 30 per cent, followed by an average compound annual growth rate of 4.2 per cent for the following four years. House prices will fall by 15.8% in the five years to April 2027.
For example, based on the current benchmark average price of housing, the benchmark average price of a home will fall to 728200 (- $264700) by April 2023. At the same time, inflation and bond yields will reach their highest levels in 30 years.