{"id":20616,"date":"2022-09-27T10:10:00","date_gmt":"2022-09-27T17:10:00","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=20616"},"modified":"2022-09-16T09:23:08","modified_gmt":"2022-09-16T16:23:08","slug":"canada-cooling-housing-market-to-hit-a-low-point-in-spring","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2022\/09\/canada-cooling-housing-market-to-hit-a-low-point-in-spring\/","title":{"rendered":"Canada Cooling Housing Market to Hit A Low Point in Spring"},"content":{"rendered":"<p style=\"text-align: justify;\">One of Canada\u2019s big banks is calling for the country\u2019s cooling housing market to hit a low point in the spring before fully adjusting to rising interest rates.<\/p>\n<p style=\"text-align: justify;\">RBC assistant chief economist Robert Hogue said in a report Friday that home buyers are \u201con the defensive\u201d as the Bank of Canada continues to raise interest rates. The central bank delivered a 75-basis-point hike last week and signalled rates will have to rise further in the months ahead as core inflation remains hot.<\/p>\n<p style=\"text-align: justify;\">But the higher cost of borrowing has sent a chilling effect through the housing market, with the Canadian Real Estate Association (CREA) reporting Thursday that home sales in August were down 1% compared with July and 24.7% lower than the same month last year.<\/p>\n<p style=\"text-align: justify;\">CREA also trimmed its forecast for both housing activity and price growth. It now expects home sales to decline 20% by the end of 2022 relative to last year\u2019s peak.<\/p>\n<p style=\"text-align: justify;\">Hogue\u2019s forecast is even more dire, however, expecting a 23% decline in year-over-year sales by the end of this year and a further 14% drop in 2023.<\/p>\n<p style=\"text-align: justify;\">RBC is now calling for the Bank of Canada\u2019s benchmark interest rate to hit 4% by year\u2019s end, up from an earlier call of 3.5%.<\/p>\n<p style=\"text-align: justify;\">\u201cHigher interest rates will disqualify more buyers from obtaining a mortgage and shrink the size of a mortgage others can qualify for,\u201d Hogue wrote.<\/p>\n<p style=\"text-align: justify;\">He added that, \u201cfewer\u2014and more budget-constrained\u2014active buyers in the market are taking steam out of prices.\u201d<\/p>\n<p style=\"text-align: justify;\">Hogue wrote Friday that he expects the housing market will adjust to the higher-rate environment early next year.<\/p>\n<p style=\"text-align: justify;\">Come spring, he expects Canadian home prices will bottom out around 14% lower than the peak seen in February 2022.<\/p>\n<p style=\"text-align: justify;\">That drop would be steeper in Ontario and British Columbia, he added, calling for home prices to drop 16% peak-to-trough in both provinces. Alberta and Saskatchewan, meanwhile, would see only a 4% decline in prices, Hogue predicts.<\/p>\n<p style=\"text-align: justify;\">Hogue\u2019s estimates are more conservative than other market forecasts.<\/p>\n<p style=\"text-align: justify;\">TD Bank said in late August that it expects an \u201cunprecedented\u201d 20% to 25% drop in home prices in the first quarter of 2023 from the highs a year earlier.<\/p>\n<p style=\"text-align: justify;\">Credit union Desjardins also expects a decline of nearly 25% in home prices by the end of 2023.<\/p>\n<p><a href=\"https:\/\/globalnews.ca\/news\/9134253\/canada-housing-market-prices-rbc-spring-forecast\/\" target=\"_blank\" rel=\"noopener\">When will Home Prices Bottom Out in Canada? RBC Says Spring<\/a> by Craig Lord | Global News<\/p>\n","protected":false},"excerpt":{"rendered":"<p>One of Canada\u2019s big banks is calling for the country\u2019s cooling housing market to hit a low point in the spring before fully adjusting to rising interest rates. RBC assistant &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2022\/09\/canada-cooling-housing-market-to-hit-a-low-point-in-spring\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-20616","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Canada Cooling Housing Market to Hit A Low Point in Spring &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2022\/09\/canada-cooling-housing-market-to-hit-a-low-point-in-spring\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Canada Cooling Housing Market to Hit A Low Point in Spring &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"One of Canada\u2019s big banks is calling for the country\u2019s cooling housing market to hit a low point in the spring before fully adjusting to rising interest rates. 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