Canadian Real Estate Prices To Fall Over The Next Year: Scotiabank

Canadian real estate has been in growth purgatory for nearly a year, and we should expect another. That’s the takeaway from Scotiabank’s macroeconomic scenarios in their Q4 2023 earnings report. The bank generally expects home prices to fall over the next year, and move much slower than usual in the following years. 

Canadian Real Estate Prices Forecast To Make A Small Drop Next Year

The base case scenario, the most likely outcome in their opinion, shows falling home prices into next year. Their forecast is a 1.9% decline for national home prices over the next 12 months. Their medium-term outlook over the following 48 months is a 2.9% compound annual growth rate (CAGR). It’s only a mild decline, followed by growth that would be significantly slower than households are used to. 

The Best Case Scenario Is Mild Growth For Home Prices

Their optimistic scenario, where things are better than expected, doesn’t show much of an improvement. A booming economy is only expected to push home prices 1.3% higher over the next 12 months. The medium-term outlook expects compound annual growth of 4.2% for the following 48 months. 

Scotiabank doesn’t expect home prices to rise higher than inflation expectations over the next year. That means the best case for real growth is negative in the short-term. 

A Faster Drop Means Faster Growth To Follow

Unlike most forecasts, Scotiabank has two adverse, or negative scenarios. In the event the economy fails to meet expectations, they see prices falling 2.3% over the next year, and 3.5% CAGR following in the years after. In the event of the “very pessimistic” scenario, home prices are expected to show a 4.3% decline over the next year, followed by 3.9% CAGR over the following 4 years. Not the end of the world, but it does tell us something about their expectations—the deeper the correction, the faster the recovery. 

Of course, this is also the bank that missed their own guidance for earnings. Take their forecast with a grain of salt, since this operating environment isn’t what anyone expected. The further out the forecast gets, the more difficult it is to nail down.



We encourage you to have a civil discussion. Note that reads "civil," which means don't act like jerks to each other. Still unclear? No name-calling, racism, or hate speech. Seriously, you're adults – act like it.

Any comments that violates these simple rules, will be removed promptly – along with your full comment history. Oh yeah, you'll also lose further commenting privileges. So if your comments disappear, it's not because the illuminati is screening you because they hate the truth, it's because you violated our simple rules.

  • Duddly-Do-Right 5 months ago

    And where do you see prices heading Steven? So many mixed predictions. It is Giving Tuesday and the charities we follow have raised not even close to half of what they did last year at this point in the day. You can hear disappointment in their voices. People are obviously living on tight budgets with nothing extra to spare. How come RE prices are still higher yoy? Who the hell is buying RE at these prices (Tricon, funded by OUR hard-earned dollars… can we sue the government for investing our money into a company that is basically destroying the future of our youth???)

    • Frank 5 months ago

      Yup, you nailed it. Purpose built rentals, what about rent to own. This gov is focussed on debt slavery ,own nothing and be happy. This is a clip about Tricon: What is the purpose of Tricon Residential?
      We are a rental housing company dedicated to providing an exceptional rental experience to every resident who makes one of our houses or apartments their home. We believe that quality rental housing can unlock life’s potential, and this drives our thinking and our actions every day.

  • Jay 5 months ago

    Name alone is a poke at the consumer. We’re gonna con you three ways to Sunday: high rent, high maintenances fees, and higher profits with your tax dollars subsidizing your rent slavery.

    Tri-con’D, try us today!

    Time to give USA a try, at least the weather is better.

Comments are closed.