Moody’s Analytics economist Andrew Carbacho-Burgos believes that growth in prices will slow nationally to 2 per cent with Vancouver and Toronto leading the decline as domestic buyers continue to struggle with affordability and foreign investment eases.
Moody’s says that some areas including Alberta and Saskatchewan may experience home prices declining, as growth rates have already slipped due to the slump in commodity prices.
The caveat to the Moody’s report is that it is based on data from before this week’s new mortgage rules were introduced.
Meanwhile, the former CEO of RBC said Tuesday that he does not see a “major, major collapse in housing” despite the new mortgage rules aimed at cooling the market.
Gord Nixon told BNN that with low interest rates and the banks managing housing risk, he does not expect a problem; however, he said that a major economic shock could be a problem due to high home prices.
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The Canadian housing market will escape a hard landing but is expected to see a slow-down, according to two economists.