Quote:
Originally Posted by opendoor
The difference back then was they were adding about 15% to the money supply every single year, so it didn't really matter what interest rates were. That's the equivalent of the 2020 increase in money supply every single year from 1970 to 1982. When money supply growth is 10-12 points above your GDP growth, you're going to have bad inflation. That's not happening now. Canada's money supply growth since 2021 has been a little over 3% annualized.
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The economic conditions now and in the 70s/80s are entirely different.
Even then, if you look at the "crash" of the early 80s, it was only about a 20% drop, that lasted for 5 years, at which point things rebounded to above peak prices within 7 years of the crash:
https://fred.stlouisfed.org/series/QCAR628BIS
A massive drop of 50+%, that will allow the average young person to buy a detached home again, would be totally unprecedented in Canadian real estate. During the last "crash", average citizens weren't snapping up cheap properties, as what was holding down prices was unaffordable mortgage rates.
A another crash is obviously possible, but with the current housing shortage, I just don't see it happening. We're already down over 20%, so if things follow the same pattern as the last crash, it's real estate staying level for about 4-5 more years and then skyrocketing up again. No further crashes.
IMO, the end of 2023 is likely the best time to buy, in terms of absolute price, as we should see a small decrease in prices through 2023 in most markets. Most forecasters have things going up from there.