Its seems as though everyday & every year around this time of year, there is a report that the prices of Real Estate in Canada will go down significantly. Last week there were reports from the money sector of the government that they think that Real Estate is over inflated by 30%.

Government: It’s funny that they thinks that because inevitably it is the government that controls the prices of Real Estate in Canada. They are the ones that have CMHC, and control their lending policies. They are the ones that control the interest rates and hold them low for so many years. They are the ones that control the policies regarding foreign investment in our country. Finally they are the ones that control the big banks.

Something has Changed: The oil prices have plummeted this final quarter of the year. The Canadian dollar has plummeted as well. The two factors which one is being championed by the average consumer, will inevitably drive the economy down, hence the dollar going down. The last time we saw the oil and dollar amount go down this much was in 2008, when the financial crisis exploded.

What Goes Up, Must come Down: While most of the country has slowed down, the major drivers of the economy have stayed relatively high. The last to dip a bit is Vancouver & Toronto. Alberta has slowed, and this is inevitable because the area is so reliant on the oil industry now.

Early Predictions for 2015: The interest rate will jump to 1% higher by the end of 2015, going up a .25 each quarter. The government will introduce tougher approvals for CMHC. The government will introduce new policies to slow the growth of Real Estate and bring the prices down. The prices will eventually slow down but not in Toronto & Vancouver, there is too much demand in those areas, but the suburbs will go down significantly in all of those areas.

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