…Oxford Economics forecasts home prices falling 24% by mid-2024 as a result of higher interest rates and anti-speculation policies that are expected to begin this fall and, if these measures fail to correct prices and they rise further, a crash of 40% and a financial crisis is expected.
@$$4$…Home prices have increased 50% since the Bank of Canada (BoC) began cutting interest rates and, even with this correction, the firm expects prices to still be 15% higher than pre-2020.
Source: Oxford Economics
Just two years ago, the firm didn’t consider such a significant decline in prices possible. Then the boom in 2020 began, pushing home prices to an extreme. If prices continue the “unsustainable” climb, the correction turns into a crash. In this scenario, a 40% price drop would happen, as well as the potential for a financial crisis. They also stress it’s unlikely, but the 24% drop in their base case scenario can result in further fallout. Further research is needed in this area, which they plan to update us with.
Oxford Economics doesn’t expect home prices to bounce back quickly. From 2025 to 2030, they see supply outpacing demand and keeping annual growth under 1% for five years which will allow incomes to catch up and affordability to return by mid-2028…
The above version of the original article by Stephen Punwasi (betterdwelling.com) was edited [ ] and abridged (…) to provide you with a faster and easier read. Also note that this complete paragraph must be included in any re-posting to avoid copyright infringement.
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