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Moody’s Analytics, one of the world’s largest risk advisory firms, released their Canadian Q2 forecast, showing how COVID-19 will impact the Canadian economy…advising their institutional clients that real estate will be impacted, with even an optimistic scenario showing price declines.
Canadian Home Prices Expected To Drop Up To 30%
Canadian real estate prices are expected to drop…[with] the declines getting bigger as the lockdown persists.
- The S0 baseline shows prices decline 8% in real terms, with a return to breakeven one year later.
- In the S3 scenario, prices decline 20% in real terms, and recover in late 2024 or 2025.
- In the S4 forecast, prices fall over 30% well into 2022, and recover in real terms towards the end of the decade. Reconstructing their model with the same macros parliament is using, prices drop about 24%.
……The firm notes that employment is the single biggest factor for home prices…[and that] the focus should be on the level of unemployment after government incentives expire…