Canadian economists have changed their outlook on property prices in Canada's major cities and are now calling for a drop of 2%, a shift from last month's prediction of an average price decline of around 8%.

The findings are from a new report from that includes results from a recent survey it conducted featuring forecasts from 16 Canadian economists.

The report was released ahead of the Bank of Canada's latest policy rate decision, which a majority of the economists believe will hold at the current overnight rate on July 15. But what's more, the economists also believe the Bank will hold the rate of 0.25% for more than a year.

READ: Bank of Canada Says Impact of COVID on Economy Has “Peaked”

According to the survey, the majority (81%) of economists believe the rate will hold at .25% for longer than a year, compared to 87% in the June BoC report. However, the biggest difference this time around is that now roughly 63% of economists don’t see the rate moving until some point in 2022 or 2023, compared to only 40% in the last report.

Moshe Lander, professor at Concordia University, is one of the panellists who believes the rate will hold into 2020. In the survey, he highlights how Canada’s economic recovery and the public health crisis will continue to be closely linked as we look beyond the summer and into full reopening.

“The economy is opening up based on positive news regarding coronavirus infections, recoveries, etc., but the economy has done very little to prepare itself for if/when a second wave returns in the fall," said Lander. "Those safeguards should be put in place now while there is time rather than in haste and haphazardly when it strikes, to limit the economic damage.”

Since the pandemic began, predictions about the Canadian real estate market have been all over the map, to say the least, with many experts initially fearing a housing collapse or, at the very least, losses in values similar to the last recession.

In the latest survey, the panellists took a more moderate view and it appears that if there is a larger correction on the horizon, it likely won’t be by the end of 2020.

The panellists say they expect property prices across Canada’s major cities to decline by around 2%. This is according to the average of the 9 panellists who gave a property price forecast for 10 of Canada’s major cities.

This more moderate forecast was a reversal from the BoC June report, which found the economists acting more pessimistic about housing valuation, predicting an average price decline of around 8% with double-digit decreases for Vancouver and Toronto. While in May, just past the height of the pandemic in Canada, a group of 15 Canadian economists predicted prices in Toronto would fall by 12.55%.

This time around, Vancouver and Calgary are forecasted to decrease the most at 4% each, followed by Toronto and Edmonton at 3% each.

Meanwhile, cities like Montreal, Quebec City, Hamilton and Ottawa are forecasted to experience more modest declines, while Halifax and Winnipeg are predicted to remain totally flat on average.

The survey findings come after the latest Toronto Regional Real Estate Board (TRREB) found that the average price of a Toronto home in June was $930,869 – an all-time high that surpassed the previous record set three years ago. What's more, Royal LePage's most recent forecast predicts a 4% rise in home prices across the GTA in 2020.

It currently seems impossible to predict which way the market – and its value – will end up going this year. The only thing we know for sure is that June was as competitive a month we've seen in a long time, and July doesn't appear to be slowing down.

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