TD doubles its forecast for home price correction

TD Economics says it expects Canadian home prices will fall even further than its previous forecasts for the third quarter and into early 2024.

An economic and financial outlook report published Tuesday raised the potential for Canada to experience “an even bigger” correction in home prices. The TD economists who authored the report said they are now forecasting a 10 per cent drop in home prices, up from the five per cent drop they had expected in September. 

“We've had to magnify that drop to around 10 per cent,” the report said. 

“There are two main culprits underpinning this change. The first is our upgraded bond yield forecast. The second is the larger-than-anticipated loosening in B.C.'s and Ontario's housing markets.”