According to a newly released report by TD Bank, the average price of a home in Canada could fall anywhere between 20 to 25 per cent by the first quarter of 2023.
The report also suggests that the number of home sales will also fall 35 percent over the same time period.
TD economist Rishi Sondhi explains the projected price drop in the average price of a home represents an “unprecedented decline” that goes as far back as the late 1980s, when the data began, but also follows an unequally unprecedented rise in prices during the pandemic.
The TD Bank report noted that the drop in home prices across the country would only partially retract the 46 per cent gain that was seen throughout the pandemic.
The Canadian bank’s report follows a projection from Desjardins earlier this month, which also forecasted a drop in home prices of nearly 25 per cent by the end of 2023.
When asked about what this drop in prices could mean for the Canadian real estate market, Sondhi said that the forecast more aptly describes a recalibration of the market rather than something more severe in the market.
According to the report, in the long-term, TD remains more positive on the outlook for housing because the Canadian bank estimates that population growth should remain healthy, a factor that underpins the fundamental demand for housing.
Over recent years, the real estate market in Canada has seen housing prices outgrowing the growth of income, resulting in the dream of homeownership becoming out of reach for many would-be buyers.
As such, the news of a drop in national home prices will be welcomed by many first-time home buyers and renters looking to purchase a new home.
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