“Buyers are sensing that prices are going to come down, so why buy now?” – Thomas Neal, a Royal LePage agent in Toronto
“A potentially severe housing correction is underway” – David Madani, an economist at Capital Economics
“We’ve got a number of sellers who say, ‘If we’re not going to sell for a particular value, we’re not going to sell at all. A lot of people are still pricing their properties based on yesterday’s market.” – Victoria real estate agent Tony Joe
“[Mortgage changes are] taking a lot of demand out of the market. You’re putting the housing market at risk, and the broader economy. The market is weak enough it could result in prices falling in many places across the country.” – Will Dunning, chief economist for the Canadian Association of Accredited Mortgage Professionals
“Developers are saying it’s a very small percentage of end users that are purchasing in the market.” – Ben Myers, executive vice-president at condo research firm Urbanation.
Even most bank economists believe Canadian housing is overpriced somewhere in the range of 10% to 20%, perhaps more so for the hottest condo markets.
“That’s manageable as long as interest rates and unemployment remain low. Absent an external economic shock that would ultimately put Canadians out of work, there is no reason to expect markets to correct hard and fast. What would force people to feel that they have to sell at much deeper prices, given that the interest rate environment is likely to remain quite benign at least through next year? Without a trigger, there should be no national housing crash.” – Doug Porter, BMO economist
– from ‘How low will house prices go? Prices are headed down for the long term.’, Tim Shufelt, Canadian Business, 17 Jan 2013 [hat-tip Cyril Tourneur, Anon and CanAmerican]
Note that now ‘economists’ are quoted as being in agreement that “Canadian housing is overpriced somewhere in the range of 10% to 20%”. Not that long ago they agreed that range was 5% to 10%. They are simply chasing the prices down. These estimates have no predictive capacity whatsoever, they are commentary of past events. [Madani is an exception. He has consistently called for 25%-off at the national level.]