"I don't think there is a bubble, or a danger of a bubble in Toronto and Vancouver,” Jim Flaherty told reporters Thursday, on the heels of a new report pointing to an accelerated slowdown in sales. “I'm actually comfortable with the fact that we've seen some moderation in pressures in that market, both of those markets and across the country."
Those within the industry aren’t quite so chuffed.
While Royal LePage’s Q3 House Price Survey points to as much as a 5% drop in sales for some key markets, other reports are now anticipating as much as a 25% drop in the average price of those homes in the next 12 months.
“We fear this adjustment is only just starting and anticipate that the resulting excess supply of homes for sale will eventually drive home prices down by as much as 25 per cent,” concludes research firm Capital Economics, in a prediction for Canada's housing market. “Home sales have slumped in recent months, not just in response to the tightening of mortgage lending standards.”
That 25 per cent – almost double the figure being thrown out by bank economists -- may heighten the fear of Realtors, mortgage brokers and investors alike as they plan for the next 12 months.
Flaherty is anticipating a much softer landing coming on the heels of his new, tighter mortgage rules meant to slow consumer debt growth.
"I hope the market will discipline itself,” he said. “Some modification is better than having some sort of hard landing."
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