Scotiabank sees 10% house-price decline by 2014
Posted: Aug 8, 2012 10:53 AM ET
Last Updated: Aug 8, 2012 4:40 PM ET
One of Canada's largest banks expects Canadian house prices to cool, but says the housing market will avoid a sharp drop like the one that occurred in the United States.
Scotiabank said in a report Wednesday that Canadian home prices will decline a cumulative 10 per cent over the next two to three years.
"Buyers’ market conditions [will] re-emerge for the first time in over a decade," Scotiabank said in the report.
The correction will be concentrated in the Toronto and Vancouver markets, two cities that have seen strong sales activity and outsized gains since the recession that began in 2008, the bank says.
In its monthly data, the Canadian Real Estate Association has repeatedly singled out those two markets for having a disproportionate impact on the closely watched average price figure.
Scotiabank appears to agree with that assessment, noting that housing markets in the rest of the country will see "more balanced conditions."
Housing demand in Vancouver has fallen 20 per cent below its long-term trend, and new data from Toronto last week showed that the number of unsold condo units hit a record of 18,123 units in the second quarter.
"In contrast, we continue to anticipate relatively more favourable demand and pricing in many other regional markets," the bank said.
Home ownership is at a record high in Canada, but while pent-up demand has been exhausted, the full impact of the slowdown may not become fully visible until mid-decade, Scotiabank said.
Even beyond that, the days of double-digit increases could be a thing of the past, the bank says. The last two housing booms of the 1970s and 1980s were followed by eight and nine years, respectively, of negative-to-flat growth, the bank noted.
Latest Toronto News Headlines
- Toronto councillors say Ford scandal not over
- One Toronto city councillor says he doesn't believe Rob Ford and that the mayor should resign. And a top Ford supporter says he doubts the scandal is over. more »
- Big-time lobbyists attended pricey Mammoliti bash
- Two of the most powerful lobbyists at city hall attended a $5,000-a-table fundraising soirée involving Coun. Giorgio Mammoliti, CBC News has learned, raising questions about whether all three people followed municipal rules governing their conduct. more »
- Torontonians speak out on Rob Ford controversy
- Ford needs to speak up on allegations surrounding a video purporting to show the mayor smoking crack cocaine, say people asked on the streets of Toronto. more »
- Man charged 20 years later in sexual assault of 9-year-old girl
- Toronto Police have arrested a man in connection with a sexual assault of a 9-year-old girl that happened more than 20 years ago. more »
Top News Headlines
- Washington police blame bridge collapse on Alberta trucker
- Washington State police say an Alberta trucker was responsible for hitting a steel beam precipitating a bridge collapse on one of the busiest routes in the American northwest. more »
- Royal Bank pledges not to outsource jobs for cash savings
- Royal Bank has promised it will never outsource a Canadian job to a foreign worker solely to save money. more »
- Canada ranks 3rd last in paid vacations
- Canada ranks third last among economically advanced countries in the amount of paid vacation time it guarantees its workers, a new U.S. study indicates. more »
- Group calls for probe of Tory database used in election robocalls
- The Council of Canadians is calling on the Conservative Party to make a list of everyone who had access to its electoral database during the last federal election and turn the information over to the RCMP and the commissioner of elections. "Anything less at this point would be a coverup," the council said in a press release Friday. more »
- Executive committee calls on Ford to address crack video allegations
- Rob Ford fired chief of staff for telling mayor to 'get help'
- Alleged Ford crack video seller not responding to calls
- Toronto Mayor Rob Ford denies crack cocaine allegations
- Toronto Mayor Rob Ford fires chief of staff
- Texting during movie lands complainant in trouble
- Giorgio Mammoliti faces questions over $5,000-a-table event
- 15 teens on school hiking trip found after night in wilderness
- Jimmy Kimmel, Jon Stewart crack jokes about Rob Ford