The biggest misleading prediction was probably saying that the interest rate would go down by 0.25%, while in reality, it actually increased, and not once, but twice. The strong Canadian GDP accounted for this change after a decade-long historical low, but it also helped in slowing down the housing market.
Another prediction that proved to be wrong was RBC’s forecast that home sales would drop by 11.5% after the 2016 increase by almost 5%. The truth is that home sale dropped by 5.3% and not 11.5%.
Regarding the average home price in Canada, it was said that it would drop by 2.8% in 2017, which would equal $476,000, but in reality, home prices kept rising, and by the third quarter, the average home price rose by over 3%. An average home was over $500,000 if we take Canada as a whole, but in Toronto alone, the average price was way above that figure, e.g., in September it was $775,546.
The Vancouver real estate market remained a hot topic in 2017 as well, and while the Bank of Montreal predicted a further market slowdown and price drop in homes, the reality seems to look a bit differently now. Even if the government measures introduced in 2016 helped cool the market, Vancouver home prices are still not as low as one would hope for. Will the Toronto market experience the same in 2018, remains to be seen.
We had seen the annual aggregate price of Canadian homes rise 13% last year, and Royal LePage predicted an increase by only 2.8% for this year, which again was a far-fetched forecast. The aggregate price rose by over 3% in Canada, while in Ontario alone, it was even 8.7% in 2017.
Canada was very proud of its biggest GDP growth since 2011, which stood at 3.1% this year, but last year, a significantly slower growth was predicted for 2017. Namely, the initial prediction was a 2.5% GDP growth.
The Toronto housing bubble already burst according to a representative from BMO Financial Group. Many wouldn’t agree with this statement, as we haven’t seen home prices drop to normal levels in Toronto. It’s true that they dropped to some degree after the adoption of certain government measures, but home prices still remain unaffordable to many Torontonians. Toronto real estate market is still cooling off, and a further slowdown is expected next year as well, but we don’t know when the prices will be fully adjusted back to affordable levels.