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
Christchurch Avenue, Brondesbury Park, NW6
£1,200 Per Calendar Month
2 bedrooms, 1 bathroom
A two double bedroom maisonette, on the first & second floor of a pupose built block located in this sought after broad tree lined Avenue. The appartment has a modern fitted 12ft kitchen/diner, large balcony off the reception room over looking the communal gardens and off street parking, within walking distance of Kilbun (Jubilee Line) tube.
Sidmouth Road, London, NW2
£1,950 Per Calendar Month
4 bedrooms, 1 bathroom
Bright and well proportioned, three double bedroom apartment, set on the first floor of this Imposing mansion style building. Comprising of a 19" hall/dining room, 18" reception room into bay, 13" kitchen/diner and large contemporary style bathroom, additional benefits include direct access to garden and lift.Clarendon Court is attractive mansion style apartment set with large gardens to rear and elegant drive and well stocked shrubbery to front, located within close proximity of local shops and transport facilities.
Earlsmead Road, Kensal Green, NW10
£2,816 Per Calendar Month
3 bedrooms, 1 bathroom
Contemporary with a twist of Period, finished to a high standard, with large stripped timber varnished floors, decking in private rear garden, boasting three bedrooms, set in this mid terraced house, with low voltage lighting throughout, only a stones throw of a variety amenities.The property offers 1140sq" of living/entertaining space over two floors, French doors leading out to garden from 29" open plan lounge/dining room, great lines from lacquered units in kitchen/dining room with stainless steel Aga style oven, and Sandstone style fully tiled bathroom.Earlsmead Road is quiet, residential side Road located off the Harrow Road only a stones throw of Ladbroke Grove, most conveniently situated close to a variety of local amenities of Kensal & Queens Park, within walking distance of both Kensal Green/Rise train Stations and alternative transport links.
Chamberlayne Road, London, NW10
£299,950
2 bedrooms, 1 bathroom
A bright and well proportioned two double bedroom apartment which has just undergone refurbishment to a high standard, set on the first floor of this older style building. Benefiting from a reception room with light timber style floors and modern working fire place, contemporary style fitted kitchen with marble work tops, dining area and Limestone tiled bathroom.Located in the heart of Kensal Rise/Green with its assortment of shops, bars/restaurants, over/underground stations and numerous bus routes. Sainsbury's is just off Ladbroke Grove which is approximately ten minutes walking distance, and Portobello market a couple of minutes from there.
Chevening Road, Queens Park, NW6
£850,000
2 bedrooms, 1 bathroom
Recently refurbished... spacious & well proportioned two double bedroom apartment set on the first floor of this Victorian mid-terraced house, with the potential to convert the loft into an additional accommodation, subject to the usual consents, benefiting from timber style flooring and some period features, located in a broad tree lined road in the sought after Queens Park.The property offers a generous 769sq" of living/entertaining space on one level, boasting high ceilings in reception room into bay sash windows, modern fitted kitchen white coloured worktops, matching breakfast bar, and Sandstone style tiling in bathroom combined w.c.Chevening Road is a leafy broad Avenue in Queens Park which leads down to Brondesbury Park, so fairly close to numerous Train & bus links, "Queens Park" parklands, shops, bars/cafes and restaurants of both busying Chamberlayne and Salusbury Road.
Fairlight Avenue, Willesden Junction, NW10
Guide price £1,120,000
5 bedrooms, 2 bathrooms
Stunning five bedroom light filled end of terrace house finished to an exceptional standard. Interior designed family home spanning over 2000 sq ft set across three floors blending contemporary and period features.Extended open plan kitchen/dining room flows out to a landscaped garden through glass bi-folding doors, double reception room/library boasting high ceilings & cornicing with original timber floors, three beautifully crafted bathrooms, one of which connects to a generously sized master bedroom.

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
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