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Tap here to see other videos from our team. If you refresh your browser, or Canadian home prices are set to drop by nearly 25% by the end of 2023, Desjardins Canada s housing market is correcting quickly and faster than we anticipated in our downbeat June forecast, Desjardins said. In the previous forecast, the Montreal-based financial services company predicted that national home prices would fall 15 per cent during the same period. In their report on Thursday, Desjardins economists Randall Bartlett, Hel ne Begin and Marc Desormeaux said that average housing prices have dropped 15 per cent, or more than four per cent, in each of the three months through June. The Desjardins team said that their gloomier outlook was a done deal, as a result of falling home sales and rising borrowing costs. The adjustment is helping to bring back some sanity back to Canadian real estate. But the housing correction won't be done across the country.
The economists said that home prices will generally fall the most over the forecast in provinces that saw the largest gains during the pandemic. I. will bear the brunt of a sharply corrected market, with prices falling by 29, 27 and 25 per cent from February 2022 to December 2023, after having risen 71, 67 and 62 per cent from December 2019 to February 2022. The economists wrote that provinces that saw the biggest price gains during the epidemic are most likely to see the largest price corrections. Desjardins estimates that prices will fall 22 and 24 per cent from the peak to December 2023 in Ontario, Canada's housing juggernauts, where the correction has been more abrupt than elsewhere. The biggest price swings in the Greater Toronto Area are seen by Desjardins for Ontario. The international immigration, return to work and improved affordability are the main factors that will lead to a decline in the price of the housing market going forward, according to the economists. The correction in Quebec has been less severe, the report said, and the price of the company expects to correct 17 per cent by December 2023, after rising 51 per cent from the end of 2019 to the peak in February of this year. Desjardins believes that Quebec will fare better because of the cheaper homes - the average price there was $510,000 in April compared to $1 million in Ontario in February - and Quebecers are in better financial shape. The energy-producing provinces of Saskatchewan, Alberta and Newfoundland are poised to fare well during this tumultuous period.
They are now benefiting from post-pandemic tailwinds, mainly in the form of higher commodity prices. The job creation and workers it attracts from all over the country will provide support for existing home sales and prices, according to the Desjardins economists. Prices in those three provinces are projected to drop a more modest four, nine and 11 per cent from the peak to December 2023, after having risen 13, 23 and 26 per cent. There is a silver lining to the outlook of Desjardins. The pace of decline in sales has cooled since the spring, according to the economists. Prices will remain above pre-pandemic levels despite double-digit corrections across the country.