'25 per cent crash' economist revises forecast – upwards!

The economist who predicted a yet-to-happen price crash of 25 per cent for Canada’s housing markets back in 2011 now says he expects the correction to be even larger. 

David Madani, an economist with Capital Economics, says that low mortgage rates could lead to a correction of 30 per cent in Vancouver and Toronto as the labour market softens and mortgage rates rise due to higher bond yields.

In a client note Tuesday Madani wrote: “Lower mortgage rates have enabled Canada’s key housing markets to defy gravity for the past few years.

"But with prices rising dangerously high relative to household incomes, there is the potential for a large correction down the road.”

He notes that in the short term mortgage rates could be lower but the longer-term outlook is for a reversal in rates, boosting the chance of a housing correction.
 

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Market update:

Investment Hot Spots:
Woodridge, Mattawan, Billings, Chauvin, Puslinch

Get help choosing the best mortgage rate

Just fill in a few details, and we'll arrange for a Mortgage adviser to help you find the best mortgage for your needs

  • How soon do you want a mortgage?
  • Name
  • Where do you live?
  • Phone number
  • E-mail address

Poll

Have your investment plans changed for 2017?