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Housing Prices to fall by 12% across Canada

Over the past years, during the pandemic, the GTA housing prices went up by almost 36%.

Over the past years, during the pandemic, the GTA housing prices went up by almost 36%.

However, due to the aggressive interest rate hiking campaign by the Bank of Canada, the prices have seen a decline for consecutive four months now.

In a report released last week, Royal Bank of Canada said that it is expecting the average home prices across the country to fall by nearly 12 per cent by early 2023. It further added that this could also be ranked as the steepest correction of the last five national downturns.

It has also been mentioned that the housing prices can also be more resilient in the areas where the prices are already relatively affordable. The housing prices are expected to fall by 3% in Alberta and Saskatchewan, and 5-8% in other provinces.

The report states, “Our forecast has home resales in British Columbia and Ontario cumulatively sagging 45 per cent and 38 per cent respectively, in 2022 and 2023, setting the stage for a home price index drop exceeding 14 per cent from quarterly peak to trough in both provinces.” It further adds, “The magnitude of the downturn would rival that of the early-1990s in Ontario (when resales fell 41 per cent and prices 15 per cent) though come well short of the early 1980s’ episode in British Columbia (when resales slumped 62 per cent and prices 27 per cent).”

RBC economist, Robert Hogue has also pointed out that the bank is not anticipating a collapse in the house prices at the moment.

 

 

Prabhnoor Kaur 

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