Toronto Dominion Bank in a new report says that they are forecasting up to a 25 percent home price drop by early 2023.
This comes as no surprise to many watching the real estate market and the report released Monday comes as a decrease in prices materialized in the summer and mortgage and interest rates spiked.
TD economist Rishi Sondhi wrote: “Our forecasted decline in national home prices would only partially retrace the 46 per cent run-up over the course of the pandemic.”As such, our forecast can be more aptly described as a recalibration of the market, instead of something more severe.”
Sondhi’s pricing forecast is in line with another one made by Desjardins economists. They expected the average national home price to fall by 15 per cent between its February high — $817,253 — and the end of 2023, but adjusted their forecast in August to predict a drop between 20 and 25 per cent.
Some in the market see this as a positive as it is a market “reset,” where buyers may get a break instead of the previous sellers market where bidding wars and soaring prices were the norm.
Sondhi’s report also estimated the number of home sales will fall 35 per cent by the first quarter of 2023.
“Our forecasted peak-to-trough decline in Canadian home sales falls well within the range seen in past housing downturns and was surpassed by the global financial crisis sales tumbled by 38 per cent,” Sondhi wrote.
Niagara Real Estate
Locally the trend has continued downward also in prices and activity.
“The market in the Niagara region continues to trend towards a buyer’s market. Average prices have dropped again in July and inventory continues to increase giving buyer’s more choices,” Said Jim Brown, President of the Niagara Association of REALTORS®.
(Below the latest statistics by region in niagara)
In the long term, TD remains positive on the outlook for housing because it predicts population growth should remain healthy, underpinning fundamental demand for housing.