Canadian Real Estate Prices To Fall Even Further: Oxford Economics

Canadian real estate is already in its largest correction on record by some measures, but it may get worse. A new Oxford Economics report forecasts further declines in home prices and sales as rising interest rates hit an already weak market. High energy prices, economic uncertainty, and stretched valuations are expected to add further downward pressure. Canadian Home Prices And Sales Expected To Fall Further Despite the severe correction in home prices, the firm sees them moving lower for at least a few months. “We expect home sales volumes and prices to slide this fall and into early next year as mortgage rates rise,” explains Tony Stillo, director of Canada economics at Oxford Economics. He notes that home prices remain elevated relative to incomes, presenting further risk for homebuilders. Rising expectations of rate hikes add to that risk. Bank of Canada Rate Hikes Expected Soon The firm expects two rate hikes from the Bank of Canada (BoC) by the end of this year, the first within days. Next week they see a 25 basis point (bp) hike at the central bank’s October 28th meeting, and another in early December. Next week’s hike may be delayed by the recent weak employment data, acco...