{"id":3117,"date":"2016-08-22T10:10:48","date_gmt":"2016-08-22T17:10:48","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=3117"},"modified":"2016-08-21T22:20:07","modified_gmt":"2016-08-22T05:20:07","slug":"canadas-housing-market-headed-for-modest-price-correction-but-when","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2016\/08\/canadas-housing-market-headed-for-modest-price-correction-but-when\/","title":{"rendered":"Canada\u2019s Housing Market Headed for &#8220;Modest Price Correction&#8221; \u2014 But When?"},"content":{"rendered":"<p style=\"text-align: justify;\">A TD Economics report published this week predicts a Canadian housing market downturn within two years.<\/p>\n<p style=\"text-align: justify;\">\u201cWe anticipate an eventual modest price correction as we approach 2018,\u201d writes Brian DePratto, a TD economist, in the four-page report.<\/p>\n<p style=\"text-align: justify;\">The correction would be in the range of 5 to 10 per cent and would mostly play out in the Greater Toronto and Greater Vancouver markets, DePratto tells BuzzBuzzNews in a followup interview.<\/p>\n<p style=\"text-align: justify;\">\u201cThis is not a crash. I want to make that clear. This is more of a normalization,\u201d he adds.<\/p>\n<p style=\"text-align: justify;\">In the report, DePratto cites the main causes of the correction that TD is calling for: \u201cThe impetus provided from past downward movements in interest rates will fade, while a number of macro-prudential measures will further weigh on activity.\u201d<\/p>\n<p style=\"text-align: justify;\">The macroprudential measures include increasing the minimum down payment on homes in the $500,000 to $1 million range, as well as the recently implemented 15-per-cent tax on foreign residential real estate buyers in Metro Vancouver, DePratto explains.<\/p>\n<p style=\"text-align: justify;\">Also, he notes \u201cthere\u2019s a change in how the insurance premiums are paid on Canadian mortgage-backed securities,\u201d adding lenders are likely to pass added costs stemming from this down to consumers.<\/p>\n<p style=\"text-align: justify;\">Recently, Canada Mortgage and Housing Corporation (CMHC) raised fees it charges some financial institutions.<\/p>\n<p style=\"text-align: justify;\">Low interest rates, which have boosted homebuying activity, will begin to have a fizzling effect simply because \u201cso many people have already taken advantage of the increased affordability [low rates] have offered,\u201d DePratto suggests.<\/p>\n<p style=\"text-align: justify;\">Over time, the pool of would-be buyers who can benefit from lower mortgage payments shrinks.<\/p>\n<p style=\"text-align: justify;\">\u201cThe increasing of rates would be a headwind,\u201d DePratto says, but the economist doesn\u2019t expect this to happen until 2018 as Canada\u2019s economy has been performing sluggishly.<\/p>\n<p style=\"text-align: justify;\">Many policymakers and observers alike had expected the relatively weak Canadian dollar to boost exports, making up at least in part for the economic ramifications of the struggling energy sector. Instead, \u201cexport volumes pulled back\u201d through the first half of this year, the TD report highlights.<\/p>\n<p style=\"text-align: justify;\">Even after the kind of housing market correction TD is forecasting, GTA and Greater Vancouver home prices would still be soaring.<\/p>\n<p style=\"text-align: justify;\">\u201cWe\u2019re still talking about a very, very high overall level of house prices, especially when you benchmark that against the median income,\u201d DePratto says.<\/p>\n<p style=\"text-align: justify;\">Last month, the benchmark price of a Metro Vancouver home was $930,400, a roaring increase of 32.6 per cent compared to July 2015. Meantime, the average price of a Toronto home hit $709,825 in July, up 16.6 per cent year-over-year.<\/p>\n<p style=\"text-align: justify;\">\u201cThe end result [of the correction] should be a housing market share of economic activity more in line with historic experience. However, this will be a drawn out process, likely to take several years to occur,\u201d DePratto notes in the report.<\/p>\n<p style=\"text-align: justify;\">\u201cIt\u2019s not an overnight process.\u201d<\/p>\n<p><a href=\"http:\/\/news.buzzbuzzhome.com\/2016\/08\/canadas-housing-market-correction.html\" target=\"_blank\">Canada\u2019s Housing Market Headed for &#8220;Modest Price Correction&#8221; \u2014 But When?<\/a> by Buzz Buzz Home<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A TD Economics report published this week predicts a Canadian housing market downturn within two years. \u201cWe anticipate an eventual modest price correction as we approach 2018,\u201d writes Brian DePratto, &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2016\/08\/canadas-housing-market-headed-for-modest-price-correction-but-when\/\">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-3117","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Canada\u2019s Housing Market Headed for &quot;Modest Price Correction&quot; \u2014 But When? &#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\/2016\/08\/canadas-housing-market-headed-for-modest-price-correction-but-when\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Canada\u2019s Housing Market Headed for &quot;Modest Price Correction&quot; \u2014 But When? &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"A TD Economics report published this week predicts a Canadian housing market downturn within two years. \u201cWe anticipate an eventual modest price correction as we approach 2018,\u201d writes Brian DePratto, &hellip; [read more]\" \/>\n<meta name=\"twitter:creator\" content=\"@RoryClipsham\" \/>\n<meta name=\"twitter:site\" content=\"@RoryClipsham\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Rory Clipsham\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/08\\\/canadas-housing-market-headed-for-modest-price-correction-but-when\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/08\\\/canadas-housing-market-headed-for-modest-price-correction-but-when\\\/\"},\"author\":{\"name\":\"Rory Clipsham\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/#\\\/schema\\\/person\\\/0672b9777e67473b9bd9247df49499c7\"},\"headline\":\"Canada\u2019s Housing Market Headed for &#8220;Modest Price Correction&#8221; \u2014 But When?\",\"datePublished\":\"2016-08-22T17:10:48+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/08\\\/canadas-housing-market-headed-for-modest-price-correction-but-when\\\/\"},\"wordCount\":483,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/#\\\/schema\\\/person\\\/0672b9777e67473b9bd9247df49499c7\"},\"articleSection\":[\"Market Updates\"],\"inLanguage\":\"en-CA\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/08\\\/canadas-housing-market-headed-for-modest-price-correction-but-when\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/08\\\/canadas-housing-market-headed-for-modest-price-correction-but-when\\\/\",\"url\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/08\\\/canadas-housing-market-headed-for-modest-price-correction-but-when\\\/\",\"name\":\"Canada\u2019s Housing Market Headed for \\\"Modest Price Correction\\\" \u2014 But When? 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