Good morning and thanks for visiting XLR8 Realty. Today we’re discussing the hottest topic in Canada, predictions of market vulnerability and the Canadian housing bubble. Christopher Lyons our Broker of record has been sounding the warning siren for about 13 months about the crazy housing surges and what that historically has meant for Canadian real estate and land owners, and the finances involved in maintaining these properties. The simple fact is housing has been used as an investment metric and like all overpriced stocks at some point, the bottom falls out and people dump and cash out.
Two prominent figures on Bay Street had a sit-down discussion that mentioned the future of Canadian real estate. Are you scared by the higher inflation? It could mean the return of a healthier market for Canadians. Canadian real estate is projected to fall double-digits in the near future. Do you see this as a realistic scenario?
As Canadians, we are more in dept than Americans and are therefore more sensitive to rate hikes. Our consumption slows when these hikes occur. Rising rates have allowed home prices and sales to cool, ending an unsustainable run. BMO director, Benjamin Reitzes adds that he’d be shocked if home prices don’t fall double digits in a relatively short time. This involves a 20 percent decline in home prices from where they are currently sitting.
Joel Prussky, managing director at BMO Capital Markets, says that the last 15 years have been an abnormal period for interest rates and does not at all predict the future. Rising rates are not unusual. Prior to the last fifteen years, they have been the norm. “I think when we are above 3% we were resetting to a more reasonable level of rates, but I think you have to see where inflation settles into, and where overnight settles into before you make that call.”
What future do you see for Canadian real estate? Do you see these predictions as accurate? Do you have your own insight on what could happen?
To see this full article, visit Canadian Real Estate To Fall Double-Digits, Or “I Would Be Shocked”: BMO Director – Better Dwelling.
For all things real estate, as well as up-to-date news, visit us XLR8 REALTY.
