Is Canada’s Housing Market Headed for a Crash in 2023 and 2024? | Exploring the Factors at Play | #CanadianHousingMarket #HousingBubbleDebate #HomePriceSurge #PotentialHousingCrash #SoftLandingOrBubble #InterestRatesAndHousing
#GovernmentResponseToHousing #COVIDImpactOnHousing #AffordableHousingShortage #RecordHighDebt.

Canada’s housing market is booming. According to the Canadian Real Estate Association (CREA), the average house price in Canada rose by 2.1% over the past year, and that’s just a fraction of what it was 10 years ago. But while some might see this as a sign of strength in Canada’s real estate market, others see it as a speculative bubble ready to burst at any moment — especially given all of the factors that could lead to such an outcome. We’ll explore those factors below before offering some possible solutions for mitigating them:

A look at the factors at play in Canada’s housing market

Canada’s housing market is at a crossroads. The country has experienced strong growth over the past decade, but now faces the possibility of a crash in 2023 and 2024. While many factors are at play, it’s important to understand that not all of these factors are positive or negative; nor are they independent from one another or equally important.

In this article we’ll explore some of Canada’s most influential economic drivers and how they interact with each other to create an uncertain future for real estate investors in this country.

A closer look at the factors that could put downward pressure on Canadian home prices

As we mentioned earlier, there are a number of factors that could put downward pressure on Canadian home prices. Let’s take a closer look at each of them:

The Canadian economy is slowing down. In fact, Canada’s GDP growth rate has been decreasing since 2017 and is now at its lowest level in over two years. This could mean fewer jobs available for workers across the country, which would reduce demand for housing (and hence lower home prices).
The Canadian real estate market is overvalued by international standards–especially when compared to other countries with similar climates and levels of economic development–and this may be causing some buyers who would otherwise purchase homes in Canada instead opt out because they value affordability more than anything else when choosing where they want to live their lives.* *The Canadian housing market has been experiencing supply shortages as well as rising vacancy rates due mainly because many people have chosen not buy homes anymore due largely towards financial reasons such as rising interest rates or declining incomes among young adults aged 25-44 years old.*

Factors that could help to support Canadian home prices

There are a number of factors that could help to support Canadian home prices in the coming years:

Low interest rates. Interest rates are at their lowest level in decades, which makes it cheaper for people to borrow money and buy homes. The Bank of Canada has repeatedly raised its target rate this year and given indications that it will continue doing so through 2020 or 2021. While higher borrowing costs may put pressure on some borrowers with high levels of debt, they would also be expected to slow down demand for new mortgages (and therefore have an impact on housing prices). In addition, higher mortgage rates would make renting more attractive relative to buying; however, we expect this effect will be minimal because most renters already live within their means and do not require financing from banks (which typically require high credit scores). Thus far there’s been no sign that rising interest rates are causing Canadians’ ability or willingness to purchase homes–the average price per square foot still rose 0.4% year over year as recently as April 2019 despite increases since then across all major cities except Vancouver where sales activity dropped significantly due to new regulations introduced last fall requiring foreign buyers who wish purchase property through non-Canadian corporations must first apply for permanent residency status before purchasing real estate anywhere outside their home country (including overseas); however if we look back further into history when similar policies were introduced elsewhere around 2000s then we see some evidence suggesting these interventions might actually cause prices

It’s possible that Canada’s housing market will experience a crash between 2023 and 2024, but there are also a number of measures that can be taken to offset those risks.

If you’re thinking about buying real estate in the next few years, it would be wise to keep these factors in mind:

Conclusion

We hope this article has been helpful in your understanding of Canada’s housing market and how it might be impacted by the factors at play. If you want to learn more about our services, please contact us today!

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