According to TD Bank, Canada’s real estate market is in for a moderate downward correction. At this point, the bank is predicting a 10 to 15 per cent decrease in Canadian home prices. Unfortunately, TD is not alone in their predictions, with other economists also forecasting that the market is overvalued by as much as 25 per cent. Let’s hope that those economists are wrong.
The first half of 2010 saw a particularly hot housing market. However, the housing market in the past couple of months has certainly cooled off. As has been said before, it looks like the recent changes to the real estate market-including tighter mortgage regulations, interest rate uncertainty, and the introduction of the Harmonized Sales Tax-meant that most of those who were in the market have already gone ahead and made their housing purchase.
So, where do we go from here? It looks like a market correction is necessary. The Canadian Real Estate Association recently released a report that basically said that we shouldn’t expect real estate numbers for the last five months of 2010 to match last years’ corresponding months.
It looks like home sellers are in for some disappointment in the coming months.
