Bank economist Robert Kavcic offers useful macro housing context in the Better Dwelling segment below. One caveat worth noting, though: from a price peak in February 2022, a housing bottom by mid-2023 would be an unusually quick downcycle.
Meanwhile, the Bank of Canada’s late but great tightening from March 2022 through early 2023 will contract financial conditions through the economy until at least March 2024, even if the BOC pauses and then returns to easing later in 2023.
How much will Canadian real estate correct? Is it a bubble? BMO senior economist Robert Kavcic drops some knowledge with our team. Here is a direct video link.
In other realty news: some 17% of office space nationally is empty in Canada, see Canada’s office vacancies hit record as space floods market.
The 13.6% vacancy rate in downtown Toronto is now the highest since 2003. An additional 62% of new space under construction nationally is expected to complete in 2023.
Also, overbuilding during the credit bubble has left excess square footage and inventory amid aging populations in many countries. See, China’s Housing Market will Revive but might not thrive. There are global consequences here:
China’s long-suffering property market will finally get some relief in 2023. But it seems unlikely to ever again become the enormous structural growth driver it was for most of the past two decades—a fact that will reshape future commodity markets and how China’s growth affects the world.
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