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Analyst: Home prices primed for 15% fall

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Guest | 13 Sep 2013, 08:16 AM Agree 0

Sadiq Adatia, chief investment officer of Sun Life Global Investments Inc., offered that analysis at the Bloomberg Canadian fixed-income conference in New York this week.
“I don’t think the demand is going to be there for housing,” Adatia told the audience of industry stakeholders reports the National Post. “I do think it’s a dead cat bounce.”
While sales climbed in both Toronto and Vancouver in August, representing a return to a seller's market, the increase was helped by fears of rising interest rates. Those fixed rates continue to edge upward, with real concern that movement will continue and hurt demand levels as Canadians struggle to qualify.
The market was expecting real value falls coming off of mortgage rule changes in July 2013.
While the number of sales did drop, prices in the country's largest market continued their rise.
Adatia is suggesting that growth can't be sustained in a high interest rate environment. Many other analysts disagree.
  • Jon | 17 Sep 2013, 02:28 AM Agree 0
    Ok i get that the market might slow down due to various factors, however why does every one always say " market is due for a correction"??? Based on what? Interest rates rising would slow down purchasing. So if they keep saying it will fall, one day they'll be right.......poor predicting in my opinion.
  • Eduard Novak | 17 Sep 2013, 07:24 PM Agree 0
    What we need is a major reduction in the number of EXPERTS! I am so sick of them.
  • abc | 17 Sep 2013, 07:40 PM Agree 0
    Can someone give me the contact number of Mr Sadiq Adatia so that I can call him next year and ask him why the market is 15 % higher not 15 % lower.
  • Bryan Jaskolka | 18 Sep 2013, 03:39 PM Agree 0
    This is ridiculous, and as far as I see it, just another way for some analyst somewhere to get their company's name in the papers. This one gives absolutely no reason for such a significant drop, nor can they back it up with anything. Interest rates are going to climb - YES! But let's not forget that we've been living in an era of historically low rates for YEARS. They had to come up sometime, and just because they are starting to now doesn't mean that homeowners are going to lose a ton of value in their home. It just means people are going to have be a little more careful and - gasp! - maybe only buy homes that they can actually afford! 10 to 15 per cent is ludicrous to me.
  • Don Hewie | 18 Sep 2013, 10:46 PM Agree 0
    Even a broken clock is right twice a day.
  • Mr.T. | 19 Sep 2013, 01:59 AM Agree 0
    I hope this guy doesn't get paid to think ! That's something everyone does for Free. Factual information backed by statistics would be more helpful than his quote "dead cat bounce" which could well apply to his thoughts. Maybe his crystal ball is flawed.
  • Jim Straughan | 19 Sep 2013, 03:00 AM Agree 0
    Investors are already looking for higher cap rates
  • Rupe | 19 Sep 2013, 04:22 AM Agree 0
    Ah! When the real estate market turned down in the Toronto Area in April of 1989 not ONE SOB saw it coming NOR did one sob forecast that it would last until 1996 and that the average price would drop 27%.
    For there to be a bust, a FEEDING FRENZIE has to is occurring now...
  • RON | 19 Sep 2013, 05:12 AM Agree 0
    I'm not sure if the drop will be that hard, but I do think something is brewing. To many over extended, getting harder to finance, a lot of equity but no cash to survive even a hiccup in a rate change or a decrease in prices. Time will tell.
  • Tom Booth | 19 Sep 2013, 08:16 PM Agree 0
    Of course the fact he is in the investment business which is experiencing low returns competing with higher return real estate has nothing to do with his comments.
  • rk | 20 Sep 2013, 01:23 AM Agree 0
    Its coming & the main reason is the extreme high consumer debt load. People are over extended & have gotten away with it because of the low rates. my wife is a lender & comes home every day with another consolidation story where people are using their homes as an ATM machine. Her comments are They are bankrupt but don't know it yet. The consumer does not want to believe that their homes will drop...but it is going to happen.
  • li | 23 Sep 2013, 02:30 AM Agree 0
    The hourse price falling maybe is a not bad news for me, :) though it's a low probability events in my opinion.
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