Home-owners across Canada have heard whispers of housing prices plummeting in excess of 25% across the board. David Madani, an economist with Capital Economics, is the source of this controversial and geographically non-specific opinion.
Bob Haber, who manages Go Canada funds for Toronto-based Canoe Financial, has a more optimistic view, Harper predicts the S&P/TSX Composite Index could double to 30,000 points within 10 years. “Global growth and all the free money out there are coming together and investors are realizing the best place in the G7 for them to put their money is Canada,” he says. “Things are in gear for Canada to really out-perform.”
Then there is last year’s prediction from the Canadian Real Estate Association, where CREA modified its forecasts at least four times. After initially predicting housing prices would increase in 2011, it now states prices will fall by a mere 1.3%.
These are just a few of the many predictions economists and investors have made for the upcoming years. As you can see, there is no consistency and no common denominator.
With there being growth in Alberta, Saskatchewan and Manitoba due to the oil industry, it’s highly unlikely that these areas will see the extreme 25% decline in housing prices predicted by Capital Economics. However, British Columbia may see prices drop, but probably not to that degree.
Housing prices vary from city to city and province to province, so in one city you might see a higher decline in pricing, a different city will more than likely reflect a different result.
There is no true ‘method to the madness’ of predicting housing prices in the coming years; all it really comes down to is timing, education and trying to buy low and sell high.
What is a ‘tried and true’ method is that over the long term Real Estate is a safe and secure option for financial growth and makes for a good long-term investment strategy.