“The surprising resilience of Canada’s housing market seems to be endless. Ever since the U.S. housing market crash, many observers have been waiting for the Canadian housing market to crash,” notes TD Economics Quarterly Forecast.
Those hoping for a crash will need to wait for at least a few more years if TD’s prediction of a gradual cooling for Canadian housing comes to fruition.
TD still views the housing market as “roughly 8% overvalued based on fundamentals, but that this will adjust over the longer term through both softer home price growth and rising household income.”
Prices are expected to pullback in 2015 due to rising condominium inventory and higher interest rates. Sales are forecast to stabilize at close to their current levels.
What will happen in 2014 though? In TD’s September 16 issue of Small Business Weekly, they “expect relatively benign price gains (+2%,Y/Y) next year, a pace in lock-step with inflation.”
However, from a regional perspective, Calgary was listed as an outperforming market that has above-average economic prospects. (Source: TD Regional Outlook, June 2013)
You can read the entire September report here