Canadian Housing Bubble Deflating
The Canadian housing bubble has been deflating since February 2022, with room to continue.
According to BMO Senior Economist Robert Kavcic, "While many are searching for bubbles in the equity market, one continues to undo itself as we speak—Canadian real estate… We’ll reiterate, as we have from the start, that this cycle will be measured in years, not months or quarters."
“This cycle will be measured in years, not months or quarters.”
Kavcic notes that the current nominal home price decline is tracking the 1990s Ontario-led bust and US price trends after the 2007 bubble burst.
If prices continue this trajectory, it could take another 5 years to recover the levels seen in 2022.
Author summary: Canadian housing bubble deflates.