Thursday, July 26, 2012

Housing market at tipping point?

Sleeper report: "Canadian home prices could fall 25 per cent." More on this prediction by economist David Madani at Capital Economics in the Globe:
“Overall, the willingness of buyers to pay these historically high house prices now looks to be proving fragile against the increasingly disappointing macroeconomic backdrop. The housing bubble in Vancouver already appears to be deflating, with only Toronto defying the inevitable. Accordingly, we expect substantial declines in house prices over the next year or two,” Mr. Madani says.
Ouch. That's a much bigger drop than the recently predicted 10 to 15% overvaluation by TD's Craig Alexander. While other stories are occupying the news cycle, this could be a big development on the horizon for Canadians.