A recent Goldman Sachs Group Inc. paper predicted a housing slowdown in Australia, Canada and New Zealand. Researchers predicted a 13 per cent decline in housing prices in Canada by the end of 2023, and even more drastic declines for Australia and New Zealand, at 18 per cent and 21 per cent, respectively.Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.
The expected decline in prices should not come as a surprise. Prices have already fallen from their peak values in the first quarter. But let’s keep in mind that housing prices in Canada increased by about 27 per cent in 2021 alone. Second, even a 23 per cent decline in housing prices only brings them back to approximately 2020 levels. But housing prices in Canada have been appreciating fast for much longer. If most Canadians considered prices excessive in 2020, a return to 2020-level prices now or later might not improve housing affordability much.Article content