(Closed) Is Canada going to have a housing crash?

posted 6 years ago in Home
  • poll: In the next few years, Canada's housing market
    Will Crash Everywhere! : (1 votes)
    4 %
    Will continue to go up beyond inflation : (1 votes)
    4 %
    WIll gradually go down : (3 votes)
    12 %
    Will stay about the same : (4 votes)
    15 %
    Will crash in areas : (7 votes)
    27 %
    Will go down in areas : (8 votes)
    31 %
    Who cares? : (2 votes)
    8 %
  • Post # 4
    1310 posts
    Bumble bee
    • Wedding: December 2011

    My husband works in finance in the USA and he is what is called a perma-bear. Sometimes his pessimism is right (two years ago I wanted to buy a house; he insisted it was right to wait because rates would be coming down more). Sometimes it is wrong (the inflation beast hasn’t shown up yet and most likely never will).

    But generally what goes up must come down. I understand in Canada they’ve had a little of that 0% down, 40-year-loan type stuff that we made look so bad in America. That would certainly give me the nellies.

    Post # 5
    2232 posts
    Buzzing bee
    • Wedding: September 2012

    Some places will take a hit but there won’t be a huge crash. Our market is so different than the US, our banks are also much, much stricter. Since the new rules were introduced in July banks have been making it very difficult to get insured (CMHC) mortgages, meaning less than 20% down. 

    I will say though the GTA (Toronto) market has slowed, definitely. Prices are still not dropping, in fact things are still selling for well over asking and part of it is that some sellers are scares so there is little inventory. 

    And like PP said, what goes up must come down and then come back up. So even if it market corrects itself by 20-30% it will eventually come back up. Sucks for those of us looking to get in! This couldn’t be any better for the baby boomer though, most of them have nothing to lose. They bought their houses 40 years ago for $25,000 and are now selling for $600k-1million around here (if not more). 

    Post # 6
    233 posts
    Helper bee
    • Wedding: November 1999

    I was going to say pretty much everything Ms. Martian just said, so I don’t have much to add. But I do think it will be a downward trend that will similar to late 90s/early 2000s… gradually, in various areas,versus a country wide collapse at once.

    Post # 7
    46672 posts
    Honey Beekeeper
    • Wedding: November 1999

    There are always price adjustments but I don’t think we are going to experience any sort of crash.

    Very few people in Canada got into their housing without a significant investment on their part.

    Post # 8
    9952 posts
    Buzzing Beekeeper
    • Wedding: December 2012

    By all accounts Canada has missed out on a whole lot of the Recession mess that the US got into totally because of the fact that we have a much stricter banking system… aka “The Big Five”… (whereas in the US historically it isn’t quite so difficult to start up a Bank).

    PLUS mortages and qualifying for them here is vastly different than in the US, and of course you have to have ALL the money here annually, because we don’t get to write off our Mortages against our taxes (and then use that payback to pour back into your House / Mortage situation)

    Consequently, there haven’t been the situation where people have walked away from their properties in that they are worth less than what they owe the banks… and fewer foreclosures as well etc.

    There has certainly been some “corrections” that have happen in industry and employment because the US is our largest trading partner… but NOTHING like the stuff that has happened south of the border.

    Most of Canada’s major cities are still in a housing boom… I know the one I live in is going crazy right now… with so much NEW construction.  There doesn’t seem to be an END in sight, IMO

    Hope this helps,


    Post # 10
    9952 posts
    Buzzing Beekeeper
    • Wedding: December 2012

    TO – AB Bride: Cannot speak to Vancouver… but Ontario (including but not just limited to Toronto) is still in a HUGE Boom.

    And it doesn’t seem to matter what type of housing one is looking for … Highrise Mega-Priced Condos – Starter Flats – Townhouses – Small, Medium or Large Single Homes (those under $ 1 Million say).

    There has been some price adjustments in some of the Mega-Million Houses… but it depends on WHERE they are more than anything else.  From what I’ve heard from my real estate friends, the high-end has dropped off a bit because people in their 30s, 40s, 50s or 60s who would normally buy such houses, seem to be diversifying.  Spending their real estate dollars in other ways… such as investment real estate (as rentals, flips, or pick up cheap and sell higher a couple of months later), or they are acquiring additional properties for themselves (such as a Cottage)… or in other cities (House in TO, Condo in Vancouver)… or in particular in the US where housing prices have come down sooo much with the US recession (Warm Climate Cities seem to be really BIG for that… Las Vegas, Phoenix, or just about anywhere in Florida)… and some folks are even buying places abroad or in the Caribbean.

    Mr TTR and I cetainly know quite a few people in our work & social circles who are doing such things.

    Meanwhile, on the regular scene…

    My City and the surrounding area is BOOMING, they are building houses everywhere !!  And lots of variety.  Something for everyone… Singles, Marrieds, Young Families, Divorcees, Empty Nesters and Retirees (Mr TTR and I shake our heads at times and wonder… WHERE exactly do all these “new home owners” come from… that and we are amazed at how quickly a streetscape, or neighbourhood can go from a whole in the ground to people moving in)

    Even in the countryside Ontario seems to be doing well… be it NEW construction in desireable small towns and communities, or those looking for a Cottage, or House  to Retire In.  (This is the market that Mr TTR and I are currently watching as we are semi-retired… and planning to give up the “rat race” and cash in once we are no longer working)


    Post # 11
    2819 posts
    Sugar bee
    • Wedding: February 2013

    @Magdalena:  In Canada, up until very recently the max. amoritization was 30 years. Now it is 25. You CANNOT put down less than a 5% downpayment, and you must pay fees if the payment is less than 20%. So no, there is no “0% down, 40-year loan” stuff going on up here. (Plus, our mortgage laws favour the banks, so you can’t just mail in your keys & be done with your mortgage. We’re held to a much higher accountability standard.)

    Post # 13
    9053 posts
    Buzzing Beekeeper
    • Wedding: June 2010

    At the moment interest rates are being kept artificially low. I still believe that even with our stricter mortgage rules, especially in the larger cities (hello million dollar average in Vancouver for a single family home) people are still stretched to their max possible payments with 3% interest mortgages. I think if interest rates went up even to 5% a lot of people would be having a pretty tough time affording their houses here. And then a mass fire sale to sell and downsize could flood the market and push prices way down.  But hopefully the interest rates rising will be managed well and we’ll avoid all that. 

    We did have a “correction” in 2008 just like everywhere else. I know our condo wouldn’t sell for nearly what we paid for it (bought for 234,000, could maybe sell today for 185,000).  But no, not nearly as painful as the us economY. 

    Post # 14
    5428 posts
    Bee Keeper

    We just renovated our house (my mpm and I are co-owners) and we are going to put it on the market within the next 2 weeks. That’ll be fun.

    Post # 15
    162 posts
    Blushing bee

    There are too many people who paid far too much for their houses, who would be in negative equity if prices fell significantly. They would either be stuck in their homes because they couldn’t afford to sell (causing the housing market to stagnate), or they would have to sell at a huge loss because they couldn’t afford the repayments, which would leave them homeless with huge debts and might possibly lead to mass bankruptcies. Not only would this leave the country in a mess, a lot of people (aka voters) would be very upset.

    The government will therefore do everything in their power to ensure that this doesn’t happen, including keeping interest rates artificially low, bailing out banks, etc. Their aim is for house prices to remain more or less constant (so people don’t end up in negative equity) and wait for inflation to make wages catch up with house prices.

    So I wouldn’t expect a house price crash any time soon. The government will bail out home owners, and bail them out again, and again, because they need to avoid thousands (millions?) of home owners ending up in negative equity.

    Post # 16
    1095 posts
    Bumble bee

    I think it will go down in some places. For instance, here in Montreal, it’s undeniable that the condo market will crash in a few years. There is way too much supply for little demand. And we’re having a provincial election in September so if the Parti Quebecois wins (which it’s looking like it will) I predict the housing market here will go down because a percentage of anglophones will leave.

    The topic ‘Is Canada going to have a housing crash?’ is closed to new replies.

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