The Vancouver real estate prices expected to drop
Justin da Rosa
Mortgage Broker News
One bank’s long-term forecast includes expected “gradual softening” and the possibility of further policy implementation.
“Our baseline forecast is for a gradual softening in overall Canadian housing activity over the next two years. To the extent that yields stay at current levels, or decline further, upside risks to our baseline forecast would materialize,” TD Bank said in its quarterly economic forecast. “Should this occur, however, policy makers would come under pressure to implement further macro-prudential rules above and beyond those already implemented or in the pipeline.”
On a more local scale, TD argues Vancovuer’s market had already peaked prior to the 15% foreign sales tax. However, that policy move will contribute to a softening market, according to the bank.
“The tax will help to reinforce the near-term slowdown in the Vancouver market, with average prices expected to fall from current levels by some 10-15% by early next year,” TD said. “This is similar to the correction that occurred in the region in 2010.”
And that tax is forecasted to help inject even more life into Toronto’s already hot market.
“Toronto’s market is likely to remain more buoyant, and may even see a modest filip to activity as investor demand moves from Vancouver,” TD said. “But, it too is likely to show the markings of cooling by late next year in response to eroding affordability (see report) and some modest upward pressure on borrowing rates.”
Copyright © 2016 Key Media Pty Ltd