Canadian home prices could fall up to 40%, warns C

Posted on JUN 17th 2017 BY Marc Da Silva
Canadian home prices could fall up to 40%, warns Capital Economics

Residential property prices in Canada could fall by as much as 40% over the next five years, led by falls in Vancouver and Toronto where the markets have boomed over the past couple of years, it has been predicted.

A severe downturn would not just hit Canadian economic growth, but would also wipe out home price increases seen across many parts of the country in recent years.

If property prices do nosedive, thousands of recent property buyers with high loan-to-value mortgages could be plunged deep into negative equity.

The warning carries extra weight because it comes from a respected expert in the field in the form of David Madani, a senior Canadian economist at Capital Economics.

“I see a correction of between 20 to 40 per cent in the Canadian housing market – over five years,” Madani told BNN in an interview this week.

Madani says that the existing hot housing markets in Vancouver and Toronto are in a speculation-fuelled bubble that appears to be on the verge of popping, which will spark the start of a major correction.

“In a speculative housing bubble, once prices stop going up the whole reason for speculating in the market disappears,” Madani said.

Vancouver property sales in May dropped by 8.5% from a record peak a year earlier, but surged 22.8% from April and were 23.7% above the 10-year sales average for the month, according to data from the Greater Vancouver Real Estate Board. But Madani points out that the rise was largely driven by low mortgage rates, which is unsustainable.

 “The uptick in Vancouver home sales is nothing more than a head fake, while the worsening sales slump in Toronto’s much larger housing market points to a correction in prices,” said Madani in a report.

“Considering that Toronto accounts for 20 per cent of the national housing market, this slump in sales will hit national second-quarter GDP, subtracting as much as 0.5 percentage points,” said Madani.

A slowdown in the housing sector could create a drag on consumer spending as consumers cut back on household consumption, according to Madani.

“Housing investment will be a drag on second-quarter GDP growth,” he added. “We estimate that growth could be as weak as 1.0 per cent annualised. But even if growth turns out somewhat better than this, the economic outlook for this year and next appears to be worsening.”

Category: News
Tags: 

POSTED BY  Marc Da Silva


< back to articles


Search

LOCATION
select
SEARCH RADIUS
select
NO. OF BEDROOMS
select
PRICE RANGE
select
 
select
Would you like to save the search?
Please choose Yes if you would like to receive email alerts when properties matching your search criteria become available on our website.
Featured
Chamberlayne Road, Queens Park, NW10
£1,450 Per Calendar Month
2 bedrooms, 1 bathroom
A recently redecorated, bright and spacious, split level two double bedroom apartment, set on the first floor of this period style building, offering timber style floorings and double glazed windows throughout.The property boasts well proportioned accommodation, arranged with comfort in mind, high ceilings within a sizable 17" reception room, modern fitted open plan kitchen and fully tiled bathroom combined w.c.Set in a trendy, buzzing metropolis, only a stones throw of a variety of bars/cafes, restaurants and shops, easy reach of both Kensal Rise & Green train stations and numerous alternative transport facilities. Available 12th April 2013
Kensal Road, Ladbroke Grove, W10
£736 Per Calendar Month
0 bedroom, 1 bathroom
Warwick's is pleased to offer a selection of self contained studio apartments close to the many amenities of Ladbroke Grove. Set within a small purpose built block, over looking the Cannal, these fully furnished studio's range, comprise of good size reception rooms with modern fitted kitchenette and separate bathrooms, wooden floors throughout and internet access. Note: Rent includes gas and water rates. Available 29 June 2010
High Road, London, NW10
£866 Per Calendar Month
0 bedroom, 1 bathroom
Fabulous and most sizable own entrance studio apartment, which has just been refurbished to a high standard, boasting from high ceilings and low voltage lighting.The property offers an L shaped accommodation with a newly fitted kitchen, dining area, separate bedroom area and contemporary style shower room combined w.c on timber style floorings.Most conveniently located in the heart of a variety local shops, bars/restaurants, and Willesden Green (Jubilee Line) tube is only a stones throw away and numerous alternative transport facilities.
Stonebridge Park, London, NW10
£295,000
3 bedrooms, 1 bathroom
Just undergone some refurbishment... spacious, well proportioned two double bedroom apartment, which has the potential to convert into three bedrooms, subject to the usual consents, set on the eighth floor of this purpose built building, benefits include own private balcony with views over London, located within walking distance of local amenities. The property offers over 774sq" of accommodation, comprising of two double bedrooms, door leading out to balcony from sizable reception room, white neutral coloured fitted kitchen, modern newly fitted bathroom with separate W.C. boasting gas central heating & double glazing throughout.Situated within easy reach of local amenities which include Tesco's & Ikea superstore, transport links, and connections to the main arteries of both London and England, (North Circular and M1 connections).
Fortunegate Road, Harlesden, NW10
Offers over £300,000
2 bedrooms, 1 bathroom
Great potential... two double bedroom apartment, private rear garden with summerhouse, on the ground floor, of a mid terraced period style house, which boasts some retained period features & high ceilings, only a short stroll of Roundwood Park.The property offers over 673sq" of living space, benefiting from high ceilings in reception room into bay window, fitted kitchen, fitted bathroom combined W.C, and gas central heating throughout.In this residential side Road, in close proximity of Roundwood Park with its Organic café, local shops, restaurants and transport links.
Earlsmead Road, Kensal Green, NW10
£925,000
3 bedrooms, 1 bathroom
Ideal family home... bright & spacious three double bedroom mid terraced period style house, which has the potential to extended to the side & loft, (subject to the usual consents), with private rear garden, located in close proximity of local amenities.The property offers 1027sq" of living accommodation, high ceilings too both reception rooms, slate style tiled flooring in fitted kitchen/breakfast room, with door leading out to garden, tiled bathroom combined W.C, and gas central heating throughout.Earlsmead Road is a quiet residential one-way side Road, most conveniently situated. A stones throw of Kensal Green (Bakerloo Line) tube, Ladbroke Grove/ Portobello Market offering a variety of shops, bars/restaurants, Sainsbury's super store, and numerous alternative transport links.

LATEST REVIEWS (35 Reviews)

I trust Warwick's with my portfolio
by R. Gensty (Landlord) 18/06/2017
In these hard times, success
by C. Bode (Vendor) 23/05/2017
Good persistence & dedication
by G. Rubinstein (Landlord) 06/05/2017

SPEAK TO US

* Required

NEWS

Independent inventories should be compulsory, says
20/06/2017
We use a separate company to do our inventories for our Client's as we feel it is important to be independent. Read More
MORE
Cookie Policy

The cookie settings on this website are set to allow all cookies to give you the very best experience. If you continue past this page without changing these settings, you consent to this. You can change your cookies settings at any time in your browser.

More Information     OK