Housing correction could lop 15% off average home price by end of 2023

0
297
Rental market proves robust housing supply dynamics help people find homes

This section is Presented

This section was created by the editors. The client was not given the opportunity to restrict the content or to check it before publication.

from RBC Mortgages

Breadcrumb Trail Links

“The correction we anticipated in the Canadian housing market has begun”

Publication date:

June 08, 20223 hours ago1 minute read 20 comments Desjardins economists expect the average home price in Canada to fall by up to 15 percent by December 2023. Desjardins economists expect the average home price in Canada to fall by up to 15 percent by December 2023. Photo by Ashley Fraser/Postmedia

content of the article

National home prices could fall an average of 15 percent to about $675,000 by December 2023 from their February 2022 peak, according to a new report by economists at Desjardins.

content of the article

“It looks like the correction in the Canadian housing market that we have been anticipating has begun, although it is still concentrated in a small number of markets,” they wrote in a residential property outlook released Wednesday.

Even in the event of such a drop, economists stressed that average home prices would still remain nearly 30 percent above their December 2019 levels and above their pre-COVID level and trendline.

content of the article

“To be clear, we believe there will be a correction in the Canadian housing market, but not a collapse,” the report said.

They said higher borrowing costs will weigh on activity in the housing market as increasingly interest-rate-sensitive households prepare.

However, they noted that the expected drop should bring more balance to Canada’s housing market, with provinces and areas that have seen the fastest price increases during the pandemic likely to see tougher adjustments.