Housing in Canada might feel like it’s in a perpetual state of unaffordability, but there’s a chance that the Canadian housing market has peaked and we could see a bit of a decline in prices by 2023.
According to a study conducted by Desjardins, wannabe homebuyers can expect to see a decline in the cost of a home in Canada over the course of the next 18 months.
The study predicts that the average price of a home in Canada will decrease by 15% by December 2023, down from its peak in February 2022.
However, the cost of a home is not expected to go down as much as it rose during the pandemic. The forecast is described in the study as a “correction,” rather than a “collapse.”
And, while the decline is could be a national trend, how much prices are likely go down is dependent on the province you want to buy in.
Atlantic provinces such as Nova Scotia and New Brunswick, which saw some of the biggest jumps over the last few years, are expected to see the largest decreases.
On the other hand, the prairies and Newfoundland and Labrador are set to see a much smaller correction when it comes to property prices, as their costs have not increased as much as other parts of Canada.
As for the major population centres of Ontario, Quebec, and B.C., the impact on property cost should be more intense than in the prairies and Newfoundland, but not as drastic as what we could see in the Maritimes.
Part of the forecasted slowdown is related to the recent rises in the national prime interest rate by the Bank of Canada.
These rises have made it more expensive to take out a mortgage and have even left one in four Canadians worrying they will have to sell their home if it increases further.