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“The correction we anticipated in the Canadian housing market has begun”
Publication date:
June 08, 2022 • 3 hours ago • 1 minute read • 20 comments 
Desjardins economists expect the average home price in Canada to fall by up to 15 percent by December 2023. Photo by Ashley Fraser/Postmedia
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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.
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“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.
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“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.