{"id":1043,"date":"2023-08-07T21:04:23","date_gmt":"2023-08-07T21:04:23","guid":{"rendered":"https:\/\/www.realestateleads.ca\/blog\/?p=1043"},"modified":"2023-09-25T20:34:01","modified_gmt":"2023-09-25T20:34:01","slug":"prevailing-belief-that-canadas-housing-correction-only-half-over","status":"publish","type":"post","link":"https:\/\/www.realestateleads.ca\/blog\/prevailing-belief-that-canadas-housing-correction-only-half-over\/","title":{"rendered":"Prevailing Belief that Canada\u2019s Housing Correction Only \u2018Half Over\u2019"},"content":{"rendered":"
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\"\"<\/a><\/figure><\/div>\r\n\r\n\r\n

When the term correction is applied to a market, it\u2019s a little bit ambiguous with what exactly that means. Most of will learn at a very young age that to be corrected is to be made aware of your error and what you should understand to be accurate instead. When it comes to markets of any sort, the average person will only claim to know that a correction means prices for whatever it is making up that market come back to where they should be.<\/p>\r\n\r\n\r\n\r\n

That\u2019s not inaccurate, but when it comes to the Canadian Housing Market it\u2019s an overly simplistic view of it. The reason for that is that there are so many variables that factor into the market and it\u2019s not like housing is anywhere near a basic commodity. We don\u2019t need to into that here, but economists and realtors alike will have a more inherent ability to see into the market and understand all of the different contributors that go into determining what would be the natural state of the market.<\/p>\r\n\r\n\r\n\r\n

It really is about as grey an area as can be though, and the one area where people will be inclined to agree or disagree is how detrimental it is when government intervention factors into the state of the market, and distorts what would be seen as a \u2018natural\u2019 housing market correction. But at ground level what agents and their clients will see is median home prices coming down, but a lack of supply meeting huge demand creating a scenario where homes nearly always sell for over asking.<\/p>\r\n\r\n\r\n\r\n

This take a great number of would-be buyers out of the game, and for realtors who struggle to drum up first-time homebuyer clients our online real estate lead generation system<\/a> here at Real Estate Leads<\/a> is an excellent way to get better results in this regard and build your real estate business \u2013 no matter the current state of the market. We\u2019ll now continue to discuss why many are saying the current market correction isn\u2019t anywhere near done.<\/p>\r\n\r\n\r\n\r\n

Continued Decline Into 2024<\/strong><\/h3>\r\n\r\n\r\n\r\n

Canada\u2019s real estate correction hit pause after the central bank promised a pause on BoC interest rate hikes in January of this year. So at that time it looked like home prices had bottomed out after falling more than 17% from a March \u201822 peak. Home prices quickly moved in the opposite direction, and going up by tens of thousands monthly with the release of pent-up demand for housing.<\/p>\r\n\r\n\r\n\r\n

But now some 7 months later, we are seeing that prices in key markets are dropping, as the latest hike rate hikes went against that promise of a pause but \u2013 in fairness \u2013 were needed to continue the fight against high inflation in Canada. So the overarching belief coming out of this is that Canada\u2019s housing downturn or \u2018cool off\u2019 isn\u2019t even as close to being over as many think.<\/p>\r\n\r\n\r\n\r\n

There are some who foresee home prices going down by another 10% or so by the first half of 2024. If that projection materializes then a typical home across Canada will have dropped between 20% and 25% and that lines up with their earlier forecast at the start of the correction. <\/p>\r\n\r\n\r\n\r\n

The bounce back seen in January is unlikely to occur again, and one of the best indicators of that is the way that typically real estate corrections are accompanied by rising unemployment plus declining consumer demand. That wasn\u2019t seen here with first half of the correction, and that\u2019s because Canada had an economy that outperformed expectations. You won\u2019t have increasing unemployment or reduced demand when an economy is doing even fairly well.<\/p>\r\n\r\n\r\n\r\n

Canadian Mortgage Rates to Go Up Too<\/strong><\/h3>\r\n\r\n\r\n\r\n

Canadian mortgage rates have been comparatively quite low for a long time, and much has been made of the ramifications of when it\u2019s cheap to borrow money. That\u2019s another tangent we don\u2019t need to go off on, but what we would say here is that the Bank of Canada is also likely to raise rates again, and what this is expected to do is raise mortgage rates to an expected 6.1% by Q3 for 2023.<\/p>\r\n\r\n\r\n\r\n

Higher costs are already promoting investors moving away from real estate investment. There are estimates that residential investment\u2019s will expand on the 3.9% quarterly decline that was recorded for the first quarter of 2023. The expectations are that through next year construction, renovation, and home resales will slow even more as financing costs rise and investment returns have less luster to them.<\/p>\r\n\r\n\r\n\r\n

Other economists will say that in the event that a correction is mitigated, a larger correction will be required and not too far down the road. This is a tradeoff for short-term satisfaction that will always come at the risk of more economic damage.<\/p>\r\n\r\n\r\n\r\n

__ Sign up for Real Estate Leads here<\/a> and receive a monthly quota of qualified, online-generated leads that are delivered exclusively to one realtor only \u2013 you! You will be the only agent who receives these leads each month, and they will be for prospective home sellers or homebuyers who are keen to buy or sell in the city or town in Canada where you are working as a real estate agent. We are always keen to hear from realtors who\u2019ve made the decision to get onboard here and the way it\u2019s been such a benefit to growing their real estate business and vitalizing the career they\u2019ve chosen for themselves.<\/p>\r\n","protected":false},"excerpt":{"rendered":"

When the term correction is applied to a market, it\u2019s a little bit ambiguous with what exactly that means. Most of will learn at a very young age that to be corrected is to be made aware of your error and what you should understand to be accurate instead. When it comes to markets of […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1043","post","type-post","status-publish","format-standard","hentry","category-general-topics"],"yoast_head":"\nPrevailing Belief that Canada\u2019s Housing Correction Only \u2018Half Over\u2019 - Real Estate Leads Blog<\/title>\n<meta name=\"description\" content=\"Prevailing Belief that Canada\u2019s Housing Correction Only \u2018Half Over\u2019 - Real Estate Leads Blog\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.realestateleads.ca\/blog\/prevailing-belief-that-canadas-housing-correction-only-half-over\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Prevailing Belief that Canada\u2019s Housing Correction Only \u2018Half Over\u2019 - 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