“Enjoy it while it lasts,” is what economist David Madani has said of the current low levels of housing prices in Canada, adding that “tell these real estate people just because it hasn’t happened, doesn’t mean it won’t.”
After almost four years to the day that one of the most quoted bears on the housing market predicted as much as a 25% decline in prices, Madani of Capital Economics said “there will be a day of reckoning.”
Madani, a self-declared independent of the mortgage and real estate industries, has predicted greater imbalances in terms of overvaluation, debt, and overbuilding in the housing sector.
He said 2015 will have a 2% decline in prices, “but over the long term nothing has changed from his original prediction that prices would fall by 25% – other than that call was made in 2011.”
“It doesn’t make it wrong,” argued Madani about the forecast. “All the conditions are still the same. We never put a specific timeline on it because we know it’s not a precise science trying to forecast this.”
However, for Phil Soper, chief executive of Royal LePage Real Estate Services Inc., Madani’s forecast should be taken with a grain of salt.
“They are a British firm seeking headlines for the last four years with the same end of the world prediction,” Soper said.
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