{"id":276,"date":"2015-12-02T09:16:30","date_gmt":"2015-12-02T17:16:30","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=276"},"modified":"2015-12-02T09:16:44","modified_gmt":"2015-12-02T17:16:44","slug":"time-to-prepare-for-a-correction","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2015\/12\/time-to-prepare-for-a-correction\/","title":{"rendered":"Time to Prepare for a Correction?"},"content":{"rendered":"<p style=\"text-align: justify;\">Oil at $35 a barrel for a period of five years would trigger a 26 percent collapse in Canadian home prices, according to stress tests run by Canada\u2019s housing agency.<br \/>\nThe results were part of a slide presentation Evan Siddall, chief executive officer at Canada Mortgage &amp; Housing Corp., gave Monday to a private audience in New York. The \u201cStress tests &#8211; Financial impacts\u201d slide included five scenarios, one of which was called \u201cOil Price Shock,\u201d which also predicts the unemployment rate would peak at 12.5 percent. Spokesman Charles Sauriol said later in an e-mail the scenario assumes oil at $35 a barrel over five years. The \u201cBase Case\u201d scenario calls for housing prices to climb 9.1 percent and joblessness to peak at 6.6 percent.<br \/>\nCrude oil traded at $41.60 a barrel at 3:21 p.m. in New York, and is set to average below$50 for a fourth month, amid record supplies. Siddall wasn\u2019t available for comment after his presentation. He\u2019s due to speak Thursday in Montreal.<\/p>\n<p style=\"text-align: justify;\"><strong>Global Deflation<\/strong><br \/>\nCMHC\u2019s \u201cUS-style Housing Correction\u201d scenario produced a 30 percent fall in home prices and 12 percent peak unemployment. The biggest hit to housing occurred under the \u201cGlobal Deflation\u201d scenario, where prices plunged 44 percent. That would also be the worst case for the labor market, pushing unemployment up to 16 percent.<br \/>\nThe price of an average home in the country rose 8.3 percent to C$452,552 ($339,000) in October from a year earlier, according to the Canadian Real Estate Association. In Vancouver, prices jumped 16 percent and in Toronto, the country\u2019s largest city, they increased 7.4 percent.<br \/>\nOther slides showed Canada\u2019s home price growth since the 2008 recession has outpaced that of the US, Australia, and the U.K. It also reiterated risks to housing include high debt-to- income and concentration of net worth in housing.<\/p>\n<p><a href=\"http:\/\/www.canadianrealestatemagazine.ca\/news\/time-to-prepare-for-a-correction-200224.aspx\" target=\"_blank\">Time to Prepare for a Correction?<\/a> by Katia Dmitrieva | Canadian Real Estate Wealth<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Oil at $35 a barrel for a period of five years would trigger a 26 percent collapse in Canadian home prices, according to stress tests run by Canada\u2019s housing agency. &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2015\/12\/time-to-prepare-for-a-correction\/\">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-276","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Time to Prepare for a Correction? 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