Comments on: RBC Risk Model Shows Canadian Real Estate Prices Can Fall 30%, No Growth Expected

By: Jack Kennedy

Jack Kennedy — Sun, 27 Mar 2022 13:39:28 +0000

How about raising rates…..inflation is running hot. Central Banks must send a message, but are pressured by politicians to keep rates low, and continue with cheap money, so the politicians can continue to give it away free, and repay years later with their respective deflated, worthless currencies.

By: Jack Kennedy

Jack Kennedy — Sun, 27 Mar 2022 13:38:31 +0000

In reply to Rod. How about raising rates.....inflation is running hot. Central Banks must send a message, but are pressured by politicians to keep rates low, and continue with cheap money, so the politicians can continue to give it away free, and repay years later with their respective deflated, worthless currencies.

By: A Kumar

A Kumar — Fri, 25 Mar 2022 15:58:10 +0000

This housing bubble primarily created on the concept of “fear and greed” is about to burst. Fear was created among first home buyers: ” buy it now or you will never be able to buy later”. Greed was created among investors:”You only need to make 200k down payment and you will get 400k within a year which is 100 percent profit in a year.” On top of that a dangerous but convincing piece of misinformation was given to fuel the fire of fear and greed: “People from around the world are coming to Canada. There are not enough houses. Demand will always outpace supply”.
No commodity or commodity index in this world can continue its rally forever at a pace five times higher than inflation. It is against fundamentals of economics. I agree with C.Rose comparison between US and Canada housing market. People in the US have much higher income that in Canada and they pay an average house price of 450K USD. In Canada almost every home owner is sitting on a mortgage of 1 million or more. This can get much uglier than predicted.

By: Yolo

Yolo — Fri, 25 Mar 2022 04:11:27 +0000

In reply to Rod. or increase another 30% 🤔

By: Yoroshiku

Yoroshiku — Thu, 24 Mar 2022 23:38:55 +0000

In reply to Rod. Since Ontario house prices were up 30% in 2021 alone, a 30% fall doesn't seem so terrible. Most people I know in the GTA have expectations of continuing dramatic price growth that are, in my view, irrational.

By: Murtaza

Murtaza — Thu, 24 Mar 2022 06:56:52 +0000

In reply to questions guy. In line with your views, it would be interesting to review the banks' historical forecasts and its comparison with actual data. One factor worth pointing out here is that banks have traditionally been conservative and causious in their lending approach, so reflected in their official reports.

By: C.Rose

C.Rose — Wed, 23 Mar 2022 21:07:59 +0000

American rates will be rising rapidly over the next few months- already affecting the american home builders and they’re not even close to our over valuation. It could really get ugly here.

By: questions guy

questions guy — Wed, 23 Mar 2022 20:32:52 +0000

I know the future is impossible to know, but it would be amazing if someone went back through the vaults to see if ANY BANK forecast has been spot on, or close to.

anyone?

By: Rod

Rod — Wed, 23 Mar 2022 20:07:55 +0000

Nobody “sees” the future, including RBC. Prices could fall well outside their 30% worst case.