Hello BP Community,

I'm currently looking at getting my second rental property in the GTA (Ontario). After keeping an eye on the market it seems that there are still many houses going over asking especially in the Hamilton area where I am focusing.

CMHC's Evan Siddall suggests home prices across Canada could fall between 9-18% over the next 12 months. That' a pretty dire prediction, particularly when it comes from a government agency responsible for our mortgage market

What are you thoughts on this prediction, and what are your current strategies in this market? Are you holding off on purchasing any new rental properties?

Thanks for your input, I look forward to being more involved in the BP community.

Alek,

This is all Crystal Ball stuff. But if anywhere would see a drop it would be T-dot. 

@Alek Suarez I don't think that anyone can confidently say where housing prices are going to go. We're seeing a complete disconnect between the economy and the stock market right now, for example. It also depends what you are buying. Multi-family will still largely be driven by NOI. Single family is more likely to see an impact.

There are always bargains to be had; I wouldn't get caught up trying to chase unicorns to predict the bottom of the market. Best of luck on your search!

@Alek Suarez I think they are underestimating the decline, in some areas especially. Zoocasa came out with a report this week that Toronto fell by 10% already in April. It varies across the country and some actually went up.

We are still seeing multiple offers in Kitchener Waterloo area and that is even on $900,000 properties that are priced at the Market and not priced below the market.  

As long as the supply and demand remain at the same levels in this market then the prices will remain stable.

News media has the ability to affect the mind of the buyers and if they hold back because of news then the declines can occur.

@Alek Suarez

“Home prices across Canada” is all you need to hear to know this is garbage. No such thing as a Canadian real estate market. Or Ontario. Or Toronto. You’re buying a specific house, with specific flaws, on a specific block, in a specific neighbourhood. And if you predict with reasonable accuracy what that will do then you’ve got no business buying now, or later.

Example: cmhc has been under reporting on the ground vacancy rates in my market for about 6 years. They’ve got the overall trend close, but in some cases numbers were showing HALF what was actually happening. Their data is useful, their people are intelligent, but statements like “canadian real estate could fall ____%” are beyond ridiculous.

@Alek Suarez . I agree with Alek.  CMHC is wrong so much of the time and they do a general statement for Canada when the markets are different all over the province and all over the Country.  

And there is no accountability for them to be right or wrong.  They just say what they think.

Markets are so different across the country.  Even locally, the real estate board can spin the numbers however they want-sales are down, sales are up (depends on time scale-previous month, previous year??), prices are up, prices are down.

If you are worried, wait.  Winter is usually the best time to buy as things are slower.  Most are in it for the long haul, so if prices go down a bit, wait 5 years and see what happens.

I had a condo in Vancouver in the mid 1990s.  About 5 years after I bought it, prices went down.  I held on to it as a long term rental until 2016.  I sold it for over 2.5x what I paid for it (2.9x based on the low in 2000).