Good article in the Financial Post that interviews CIBC bank economists. In it, the economists note “Overall, as the fog clears, we expect to see average prices 5-10% lower relative to 2019 levels, with high cost units in the high-rise segment of the market seeing the most notable price declines,” they said.
It is noted that the fragility of the economy means there will likely not be a quick snapback to the strengthening housing market we were seeing emerge in the first couple of months of the year. The damaged labour market will likely dampen consumer confidence for some time. Sadly, many job losses and business closures will be permanent. With a high unemployment rate expected to last into 2021, we may not see any semblence of equilibrium in the housing market until then.
Price discovery too becomes more challenging in a somewhat 'frozen' market environment where there are scant listings due to the social distancing measures in place. Reluctant prospective sellers and hesistant would-be buyers don't make for a normal operating environment. Once this anxiety eases, we will work our way back to a more normally functioning transaction marketplace.