Oh no......Canadian Real Estate Prices Expected To Drop 24%, Can Crash 40%: Oxford Economics

Mar 19th, 2022 1:11 pm

#1

sffpcgtx [OP]: Banned; Mar 3, 2021; 707 posts; 359 upvotes

Mar 19th, 2022 1:11 pm

Oh no......Canadian Real Estate Prices Expected To Drop 24%, Can Crash 40%: Oxford Economics

24% by 2024........eh

Canadian real estate prices might be in for a bit of a dip if one of the world’s leading forecasters is right. Oxford Economics’ latest forecast shows home prices falling 24% by mid-2024. Higher interest rates and anti-speculation policies are forecast to begin the price declines this fall. If these measures fail to correct prices and they rise further, a crash of 40% and a financial crisis is expected.

Link: https://betterdwelling.com/canadian-rea ... economics/

Mar 19th, 2022 1:26 pm

#2

Dealmaker1945: Deal Addict; Oct 23, 2017; 2677 posts; 2248 upvotes; GTA West

Mar 19th, 2022 1:26 pm

I can see this for condos. Ultimately there are only so many people who can live in those tiny investor condos that I see going up.

But maybe I am just biased by my experience from the late 80's and early 90's. Condos prices did crash and builders went bankrupt trying to get distressed buyers to close on their units. I managed to dump my own unit and rented dirt cheap in a luxury tower where most of the units were unoccupied and not paying maintenance fees. It took a long time to resell and fill those towers.

I think the key to derisking your condo investment is to buy QUALITY for the long term. A lot of amateur flippers are going to get burned.

Mar 19th, 2022 1:44 pm

#3

spike1128: Deal Guru; Oct 7, 2010; 14045 posts; 4722 upvotes

Mar 19th, 2022 1:44 pm

Dream on buddy. I been calling bear for the last 10 years. There is no stopping the rise. The prices are all driven by foreign money. Most Asia but some from Middle East.

+7

Mar 19th, 2022 1:47 pm

#4

sffpcgtx [OP]: Banned; Mar 3, 2021; 707 posts; 359 upvotes

Mar 19th, 2022 1:47 pm

Ahahahahaha...you're saying this as an economist / market guru or someone who took out more money in debt to overbid on a home, and doesn't want to hear the truth?????? LOL

Houses were affordable before covid i.e. 2019.

spike1128 wrote: ↑ Dream on buddy. I been calling bear for the last 10 years. There is no stopping the rise. The prices are all driven by foreign money. Most Asia but some from Middle East.

+2

Mar 19th, 2022 1:48 pm

#5

booblehead: Deal Expert; Jul 30, 2007; 32209 posts; 19509 upvotes; Toronto

Mar 19th, 2022 1:48 pm

How many studies have this Oxford economic done in the past ? How many times have they been correct ?

+10

Mar 19th, 2022 4:41 pm

#6

sffpcgtx [OP]: Banned; Mar 3, 2021; 707 posts; 359 upvotes

Mar 19th, 2022 4:41 pm

Anything with the words Oxford, Cambridge and Havard, is always on the money!

booblehead wrote: ↑ How many studies have this Oxford economic done in the past ? How many times have they been correct ?

Mar 19th, 2022 4:44 pm

#7

Geologic: Deal Addict; Dec 5, 2004; 3982 posts; 560 upvotes; Toronto

Mar 19th, 2022 4:44 pm

Folks it's Better Dwelling, move on.

+22

Mar 19th, 2022 4:47 pm

#8

romsan04: Deal Addict; Mar 22, 2004; 3687 posts; 1103 upvotes

Mar 19th, 2022 4:47 pm

Let me know when. I have cash to invest:)

+2

Mar 19th, 2022 4:47 pm

#9

DisneyKruze: Deal Addict; Jun 15, 2015; 1023 posts; 1235 upvotes; Thornhill, ON

Mar 19th, 2022 4:47 pm

I won't be waiting for a 24% drop to start buying

+2

Mar 19th, 2022 4:51 pm

#10

angrycanadiandud: Newbie; Oct 10, 2018; 26 posts; 22 upvotes

Mar 19th, 2022 4:51 pm

media likes to talk about downside, but economists have upside results as well. interpretation is on the media, but they are really dumb so every year we only see articles talking about -10% -20% is possible this year.

Mar 19th, 2022 4:57 pm

#11

teoconca: Deal Guru; Oct 16, 2008; 10293 posts; 4555 upvotes; Maple

Mar 19th, 2022 4:57 pm

angrycanadiandud wrote: ↑ media likes to talk about downside, but economists have upside results as well. interpretation is on the media, but they are really dumb so every year we only see articles talking about -10% -20% is possible this year.

Exactly! To the point, I don’t read much into these articles. Prediction and forecast from them are pretty bad, waiting for RE crash for years like 21 years, small dips don’t count.

...

+3

Mar 19th, 2022 5:30 pm

#12

freemoney118: Newbie; Jan 23, 2022; 33 posts; 133 upvotes

Mar 19th, 2022 5:30 pm

If I have to bet, the next 20% would be downside move, which will take us to about 10-15% ABOVE pre-COVID in most area.

The suburb upside move is done for certain. The core might do better next couple years.

Driving all the way from Barrie, New Market, Pickering, etc... to downtown isn't fun, even just for 2 days a week.

Reality will start to hit.

+7

Mar 19th, 2022 5:43 pm

#13

tdotboy123: Newbie; Jan 9, 2010; 33 posts; 20 upvotes; Toronto

Mar 19th, 2022 5:43 pm

Try building any new built houses with 40% price down given how prices of material/labour has taken upward!

+2

Mar 19th, 2022 6:04 pm

#14

htiek: Member; Sep 14, 2009; 273 posts; 540 upvotes

Mar 19th, 2022 6:04 pm

Dealmaker1945 wrote: ↑ I can see this for condos. Ultimately there are only so many people who can live in those tiny investor condos that I see going up.

But maybe I am just biased by my experience from the late 80's and early 90's. Condos prices did crash and builders went bankrupt trying to get distressed buyers to close on their units. I managed to dump my own unit and rented dirt cheap in a luxury tower where most of the units were unoccupied and not paying maintenance fees. It took a long time to resell and fill those towers.

I think the key to derisking your condo investment is to buy QUALITY for the long term. A lot of amateur flippers are going to get burned.

I say exactly the opposite.

People bought a pre-construction condo are shielded the most, primarily because of the 4-5 years long term investment horizon.

Sold a few pre-con condo units last summer.

Resale transacted price $590k (Sept 2021)
Current transacted price $720k (Mar 2022)

In 6 months, price went up 22% already.

So what if there’s a 24% drop, even right now???

Just resets back to Sept 2021 pricing, the pre-con buyers still got 3 more years to weather the storm.

+2

Mar 19th, 2022 7:11 pm

#15

zakarydoks: Deal Addict; Jan 14, 2009; 4898 posts; 3972 upvotes; Vancouver, BC

Mar 19th, 2022 7:11 pm

Jokerpersona wrote: ↑ Why is every person who "forecasts" a crash as insufferable as you are? Did you all go to a convention or something and agreed on being just utterly terrible people.
...

Doubt it. It looks like they can't regulate their negative emotions so it explodes. It's probably one of the reasons they can't afford a house and that's why you noticed the correlation.

If you buy vgro for a thousand years Vancouver homes will still be out of reach.

+4

Mar 19th, 2022 7:12 pm

#16

Piklishi: Deal Addict; Jul 25, 2015; 2141 posts; 1900 upvotes; Burnaby, BC

Mar 19th, 2022 7:12 pm

What's 24% correction going to do in a rundown unlivable 2.3M house in Vancouver? So it's going to be 1.7M now and a lot of minimum wage earners will be bidding that up to 2M I guess since it will be a great entry point...Yeah it's going to be great along with the 0.25% rate increases.

I think if inflation continues to go up the prices will go up. We have bigger problems than RE now. I will wait till the mortgage rates go up to 3%+2.2% Prime then we can consider a soft landing aka 25%.

Last edited by Piklishi on Mar 19th, 2022 7:14 pm, edited 1 time in total.

+1

Mar 19th, 2022 7:14 pm

#17

licenced: Deal Fanatic; Jul 3, 2011; 6517 posts; 3792 upvotes; Thornhill

Mar 19th, 2022 7:14 pm

20, even 24% is a welcome adjustment, it manages to erase to precipitous increases of the last 8 months and might get us back to a more reasonable market.

40% sure - but it needs the Ukrainian conflagration to turn into a multi-country war.

If that happens well it could be 1 one hundred percent correction - I note they're not daring enough to go that far.

+1

Mar 19th, 2022 7:23 pm

#18

Wpegger: Deal Fanatic; Apr 11, 2012; 5839 posts; 3101 upvotes; Winnipeg

Mar 19th, 2022 7:23 pm

for those who are bullish on RE, do you think the prices can keep on climbing forever detached from fundamentals?

Zoomer Wireless | Public Mobile | Simplii | Tangerine | CIBC

Mar 19th, 2022 7:31 pm

#19

Piklishi: Deal Addict; Jul 25, 2015; 2141 posts; 1900 upvotes; Burnaby, BC

Mar 19th, 2022 7:31 pm

Wpegger wrote: ↑ for those who are bullish on RE, do you think the prices can keep on climbing forever detached from fundamentals?

Not a bull but depends what you consider fundamentals...

+1

Mar 19th, 2022 7:38 pm

#20

zakarydoks: Deal Addict; Jan 14, 2009; 4898 posts; 3972 upvotes; Vancouver, BC

Mar 19th, 2022 7:38 pm

Piklishi wrote: ↑ Not a bull but depends what you consider fundamentals...

Probably something stupid like "7 times Canadian median income". So $420k for a detached house in Vancouver.

If you buy vgro for a thousand years Vancouver homes will still be out of reach.

+3