How risky will Canadian real estate be in 2020?

HIGHLIGHTS Toronto and Vancouver are the cities at a highest risk of a home price correction. Even though Vancouver prices have dropped in the past year, affordability is still much worse than anywhere else in Canada and this leaves it vulnerable now that Foreign Direct Investment has shifted to Toronto and Ottawa. With most Canadian cities exhibiting indicators of high risk, Canadians should be buying homes as a shelter and lifestyle choice rather than considering real estate to be a low-risk and high-return investment.

Economists measure risk in terms of volatility and uncertainty. If prices in a market move dramatically (i.e., up or down) and unpredictably (e.g., not connected to local economics) then it is considered risky. Our full report on the risk in Canadian real estate answers the following questions:

1. How volatile and uncertain is Canadian real estate?

2. What does the government of Canada think?

3. What does the Bank of Canada think?

4. How should homebuyers and owners approach the market?

Real Estate Risk

Risk in the Canadian Real Estate Market

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