We asked 10 of the city’s top real estate experts for their thoughts on what the market will bring in the months ahead. They gave their input on everything from interest rates to the recession to the housing crisis. Benjamin Tal, Deputy Chief Economist of CIBC World Markets Inc. predicts what’s coming for the year ahead:
Economically speaking, I think that the inflation panic will ease. Over time, spring, summer, I think that people will not be talking about inflation so much. I think that the short-term interest rates, the prime rate, variable rates will remain relatively stable during the course of the year as I suggested.
But the five-year rate will start easing slowly. Everybody will be talking about the recession over the next six months. But if we get a recession, in my opinion, it will be a wannabe recession. It will not be a real recession because in a real recession you need blood in the labour market, the unemployment rate to rise. I don’t see it happening because we have all those vacancies.
And remember, the consumer is sitting on $350 billion of excess savings that will buffer the economy from a real recession. Assuming that the Bank of Canada will not overshoot the housing market, the rate of change will slow, which means that things will start to stabilize by spring, and by summer I think that the market will stabilize. It will not pick up in any significant way because more supply will come into the market, but I don’t see the rate at which it has been declining as sustainable.
This is an excerpt from Post City’s 16th annual Real Estate Roundtable in partnership with the Rotman School of Management. Click here for more excerpts from the panel. Special thanks to our incredible sponsor The RE/MAX Collection.
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