Forced Selling May Be Headed For Canada’s Housing Market – Some previously priced-out homebuyers might have a shot at getting into pricey housing markets right now.Synergy Mortgage
A sharp rise in joblessness, combined with the bust-out of the short-term rental market, will send Canadian house prices down in the short term, some market experts are saying.
And for some homebuyers ― those who are still in decent financial shape in this crisis ― that presents a rare opportunity for bargains in some of Canada’s priciest cities.
So far, experts aren’t predicting a huge price decline. Stephen Brown, senior Canada economist at U.K.-based Capital Economics, says the drop will be softened by the fact banks are delaying mortgage payments for many struggling homeowners. That reduces the pressure on some households to sell.
But that likely won’t stop a house price drop entirely, Brown wrote in a client note this week, predicting a 5-per-cent slide in the coming months.
And “there is clearly a risk that the small number of houses that change hands do so at even lower prices,” he added.
With unemployment spiking at a record-breaking pace in recent weeks, and with the tourism industry shutdown taking all the wind out of the short-term rental (meaning Airbnb) market, “it seems likely that there will be some forced sellers in the coming months,” Brown wrote.
“Those sellers will inevitably have to accept lower bids from the few people willing to buy in the current environment.”