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Heads up, homebuyers: Economists see more home price declines in 2023


Many economists say Canada's housing market, a key pillar of the economy, will likely see more weak sales activity and home price declines through next year.


Robert Kavcic, director and senior economist at BMO Capital Markets, figures "we're only about halfway there" when it comes to home prices finding a floor. BMO's official call is for a 20 per cent decline in the national benchmark home price. The Canadian Real Estate Association's MLS Home Price Index shows the seasonally-adjusted benchmark price of a home fell to $756,200 in October from its February peak of $840,000, a reduction of about ten per cent.


"I would say easily another 10% (decline) on the national house price over the course of the year and we'd probably find a bottom sometime in the later stages of the year," he told Yahoo Finance Canada via phone.


"The investor class is gone until this market gets repriced"
-Robert Kavcic, BMO Capital Markets

Affordability is still stretched for many homebuyers as any moderation in prices has been negated by soaring borrowing costs.


David Doyle, Macquarie's head of North America economics, says home prices would have to fall by another 15 per cent to return to the affordability levels of around 2018.


Read the full article HERE

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