yonge city square condos north york.House prices may fall by more than 50%? The Canadian housing market is adjusting. Before that, RBC had already lowered its housing market forecast once.Please Visit:yonge city square condos north york to Get Your VVIP Registration Today!
However, RBC found that all major property markets reported further declines, and they saw a widening range of housing adjustments, which could be the most serious in half a century.
Canada’s main real estate market reported sales last month, and the figures are not satisfactory.
Both Toronto and Vancouver have reported sharp declines in sales and prices, with Toronto homes down more than 500000 in the past six months, while other large Canadian markets are also showing signs of decline.
Robert Hogue, assistant chief economist at RBC, said: “the housing adjustment is now spreading across Canada.”
“in Toronto and Vancouver, the rapid decline in sales activity is becoming one of the worst declines in the past half century.”
RBC said higher interest rates were the catalyst for the housing correction. When buyers realized that house prices could not rise forever, the red-hot property market was forced to cool down.
After experiencing a rapid rise in house prices, buyers are unlikely to react quickly to falling prices.
Markets with smaller price increases are more likely to adjust less, but only likely, the bank said.
Key indicators of the housing market in Toronto and Vancouver show that the adjustment has begun.
For the Toronto market, RBC uses a “full retreat” (Pullback in full force) to describe it.
Hogue said Toronto’s housing market is growing at its slowest pace in the past 13 years, excluding the April 2020 lockout.
In addition, the number of active houses has increased by 58% since March this year. The transaction price index of the MLS is down 13%, or about C $178000.
The decline in July alone reached C $47000.
“We expect buyers to continue to be at a disadvantage in the coming months as they cope with rising interest rates and poor affordability.
We see them get further price declines, especially in areas where real estate values soared during the pandemic, “RBC said in the report.
Vancouver real estate performed slightly better than Toronto, and seasonally adjusted sales in Vancouver also fell 40 per cent in the past four months, according to RBC.
House prices in the greater Vancouver area have fallen 4.5 per cent (C $57000) since April.
So far, the decline may sound small compared with Toronto, but RBC believes that will soon change.
“We think the housing market adjustment in Vancouver is still in its early stages. The Greater Vancouver area is the most interest rate sensitive, and buyers are under further pressure as the central bank’s interest rate hikes have made affordability suffocating. ” Hogue said.
According to earlier forecasts, there will not be much slowdown in large, cheaper markets, but now forecasts have also changed, suggesting that this may not be the case.
At present, Calgary and Montreal, where house prices are low, have also been affected.
RBC Bank explained that house prices in Calgary reached a cyclical peak in April. Montreal has not released MLS HPI data for July, but the bank sees the median price as a turning point.