The forecast
BMO senior economist Robert Kavcic projects that Canadian home prices will not return to their March 2022 peak until around 2029, roughly seven years out from that high. Here is the context behind that number.
Prices climbed 65% between 2020 and March 2022, an extraordinary run driven by historically low interest rates and pandemic-era demand. Since that peak, prices have fallen 19%, and remain about 17% below where they were at the top of the market. Kavcic's advice for anyone watching the recovery: think years, not months.
Why the recovery is slower this time
Three forces that fueled the 2020 to 2022 surge have largely run their course.
Millennials, the generation that drove a wave of first-time buying and move-up purchases, are now past their peak family-formation years, the youngest of that generation are already in their mid-thirties. International migration, another major source of housing demand, has already begun slowing even before recent federal policy changes further tightened it. And interest rates, while off their 2023 highs, are not expected to return to the ultra-low, post-2008 levels that made the 2020 to 2022 run possible in the first place.
For perspective, BMO notes this seven-year timeline is actually shorter than some past corrections: Vancouver's 1995 downturn took about nine years to recover, and Ontario's early 1990s correction took fifteen years (twenty-two, adjusted for inflation).
What this means if you are selling
Anchoring your price expectations to 2022 numbers is not realistic right now, and it can cost you time on market if a listing is priced against a peak that may not return for years. The homes moving fastest today are the ones priced accurately against current, not historical, comparables. A well-priced home in today's market still generates real interest, but the strategy has to reflect where the market actually is.
What this means if you are buying
A slower recovery curve has historically meant more room to negotiate and less pressure to rush a decision. If you have been sitting on the sidelines waiting for a crash or a full rebound before making a move, it is worth having a conversation about what the data actually supports rather than what feels intuitively true.
The bottom line
Nobody has a crystal ball, and forecasts get revised as conditions change. But the current data points to a market that recovers in years, not months, and pricing decisions today should be grounded in that reality rather than in memories of 2022. If you want to talk through what this means for your specific street, your specific home, or your specific plans, we are always happy to pull real comparables and have a straightforward conversation, no pressure, no sales pitch.
Sources: https://betterdwelling.com/canadian-real-estate-prices-wont-recover-peak-until-2029-bmo/ | https://www.theglobeandmail.com/real-estate/toronto/article-bmo-economist-real-estate-slow-grind-affordability/
With care,
Matthew Rufh PREC* | Rufh Real Estate Group | Real Broker B.C. Ltd. | 604-210-6540 | matthew@rufhgroup.com
