The outlook, contained in a report authored by senior economist Daan Struyven and managing director Sid Bhushan, also predicts further pressure on housing – but with prices ultimately stabilizing to above levels prior to the pandemic. Part of the reason is that the U.S. banking giant believes the Bank of Canada is nearing the end of its interest rate hiking cycle, though not before a further 75 basis points in interest rate hikes by early next year.
Goldman sees Canadian housing prices ultimately falling 18 per cent from their peak in February. They’ve already fallen 10 per cent, based on MLS Home Price Index data up until October. That means if the bank’s views turn out to be correct, prices will be subject to a further drop of eight percentage points before flatlining and possibly rising once again.
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