{"id":5684,"date":"2017-05-01T11:11:28","date_gmt":"2017-05-01T18:11:28","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=5684"},"modified":"2017-04-27T15:58:58","modified_gmt":"2017-04-27T22:58:58","slug":"theres-a-40-chance-canadian-home-prices-level-off-but-how-about-a-crash","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2017\/05\/theres-a-40-chance-canadian-home-prices-level-off-but-how-about-a-crash\/","title":{"rendered":"There\u2019s A 40% Chance Canadian Home Prices Level Off \u2014 But How About A Crash?"},"content":{"rendered":"<p style=\"text-align: justify;\">The top economist at RBC\u2019s investor division has estimated the chances of the three possible and very different outcomes for Canadian home prices.<\/p>\n<p style=\"text-align: justify;\">Put simply, the options are \u201cup, sideways, or down,\u201d but Eric Lascelles, the chief economist for RBC Global Asset Management, gets more specific.<\/p>\n<p style=\"text-align: justify;\">\u201cThe most likely outcome\u2026 is that home price gains slow to a snail\u2019s pace or even go sideways,\u201d writes Lascelles in his April 24-28 #MacroMemo published on professional social media site LinkedIn.<\/p>\n<p style=\"text-align: justify;\">Lascelles estimates there\u2019s a 40% chance of this happening, and says \u201cthis is certainly what regulators desire,\u201d nodding to Ontario\u2019s Fair Housing Plan, unveiled last week.<\/p>\n<p style=\"text-align: justify;\">In this scenario, the downturn in housing activity and prices would shave off a few percentage points from the national GDP over several years, Lascelles states.<\/p>\n<p style=\"text-align: justify;\">As it stands, the housing market generates roughly 15% of the Canadian GDP, whereas 10 per cent would be \u201cnormal.\u201d<\/p>\n<p style=\"text-align: justify;\">Policymakers have been busy trying to tamp down what many observers agree is unsustainable growth in Canada\u2019s hottest housing markets.<\/p>\n<p style=\"text-align: justify;\">The Fair Housing Plan is a 16-point policy, largely meant to calm housing markets around southern Ontario, including the Greater Toronto Area\u2019s, the most active in the country.<\/p>\n<p style=\"text-align: justify;\">Greater Toronto Area home prices averaged $916,567 in March, up 33.2% annually, according to the Toronto Real Estate Board, a consistent opponent of intervention to curb demand.<\/p>\n<p style=\"text-align: justify;\">Major steps set to impact the GTA market include the introduction of a Vancouver-esque foreign-buyer tax and a province-wide expansion of rent control.<\/p>\n<p style=\"text-align: justify;\">These measures follow mortgage tightening last year from the federal government.<\/p>\n<p style=\"text-align: justify;\">\u201cHowever, regulators have made many efforts in the past and never managed to permanently slow Canada\u2019s freight train of a housing market,\u201d notes Lascelles.<\/p>\n<p style=\"text-align: justify;\">Given this, and assuming interest rates stay low and unemployment rates decline, Lascelles says there\u2019s a 30% chance \u201cthis boom continues\u201d in Canadian real estate.<\/p>\n<p style=\"text-align: justify;\">Then there\u2019s the third choice: poor affordability and surprisingly effective government policy pulldown home prices \u201cfairly far.\u201d<\/p>\n<p style=\"text-align: justify;\">Lascelles pegs the likelihood of this happen at 30% as well and says \u201cthis would unleash a period of quite weak economic activity in Canada.\u201d<\/p>\n<p style=\"text-align: justify;\">Of course, Lascelles doesn\u2019t claim to have a crystal ball. \u201cLet us confess that forecasting housing has all the precision of handling a slippery eel,\u201d he admits.<\/p>\n<p><a href=\"http:\/\/news.buzzbuzzhome.com\/2017\/04\/40-chance-canadian-home-prices-level-off.html\" target=\"_blank\" rel=\"noopener noreferrer\">There\u2019s A 40% Chance Canadian Home Prices Level Off (Expert Says) \u2014 But How About A Crash?<\/a> by Josh Sherman | Buzz Buzz Home<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The top economist at RBC\u2019s investor division has estimated the chances of the three possible and very different outcomes for Canadian home prices. Put simply, the options are \u201cup, sideways, &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2017\/05\/theres-a-40-chance-canadian-home-prices-level-off-but-how-about-a-crash\/\">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-5684","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>There\u2019s A 40% Chance Canadian Home Prices Level Off \u2014 But How About A Crash? &#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\/2017\/05\/theres-a-40-chance-canadian-home-prices-level-off-but-how-about-a-crash\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"There\u2019s A 40% Chance Canadian Home Prices Level Off \u2014 But How About A Crash? &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"The top economist at RBC\u2019s investor division has estimated the chances of the three possible and very different outcomes for Canadian home prices. 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