RBC: Risk Of Housing Downturn ‘Limited’ In 2014

In a span of a few months, RBC has gone from expecting “modest price declines” in the Canadian real estate market to prices increasing by 1.5% nationally in 2014.

RBC is also forecasting a modest gain of 0.6% this year sales-wise, but that will “mask a fairly wide range of performances at the regional level.”

Alberta is described as being at one end of the spectrum where home resales in the booming province are expected to grow strongly.  At the other end, the central Canadian markets are expected to see declines.   In between, markets in BC, Saskatchewan, Manitoba and Atlantic Canada are expected to see modest advances.

What are the risks of a downturn in housing this year?  It “cannot be entirely dismissed,” states RBC, but  “it is limited because we expect that homebuyer demand will continue to be supported by positive employment trends, steady population growth and still-historically-low levels of interest.” (Source)

Forecast History 

We expect, nonetheless, that softening demand later his year and growing supply of newly completed condo units will rein in price increases in 2014.  We project home prices to increase by 1.5% nationally in 2014.
January 15, 2014

We expect that the combination of flattening demand later next  year and strong supply of newly completed condo units will rein in  price increases in 2014. We project home prices to increase by less than 1% nationally next year.”
December 13, 2013

We expect that the combination of flattening demand later next year and strong supply of newly completed condo units will rein in price increases nearly to a standstill in 2014  We project home prices to increase by only 0.6% nationally next year.”
-October 13, 2013

We expect that the combination of flattening demand later next year and some strong supply of newly completed condo units will lead to some modest price declines in 2014, mostly centered in the condo segments.”
July 13, 2013

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