Madani sees 30 per cent chance of recession, housing to fall

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There could be a national recession in Canada within a year according to David Madani of Capital Economics. In a note on Friday Madani, who proudly proclaims that he is independent of the housing sector, opined that if business investment was hit by 10 per cent due to the lower oil prices it could have a ripple effect through the economy which may cause recession. He noted that although exports are looking stronger they may not grow fast enough to offset falling oil revenue. Madani is also sticking to a four year old prediction for a “day of reckoning” for the housing market; a scenario that has been dismissed by many in the industry. Phil Soper of Royal Le Page told the Financial Post that when the price rises since the original prediction are factored in there would have to be a 45 per cent drop for it to be accurate. Read the full story.


 
  • Kuldip S Panesar Homeland Mortgage Corp. on 2015-02-11 5:43:34 PM

    David Madani is dreaming that real estate prices will fall 30 % in near future .His calculation is based only on oil prices. He has ignored the other factors which are having a direct impact on the real estate market as the land is limited , population is increasing , global investors are having influence on the market. Still there is inflation which the Bank of Canada is going to control. They have lowered the Bank rate of interest recently.
    As the matter of CMHC is concerned they are very prudent when they insure the mortgages , there is no blanket insurance on the mortgage . they have stipulated their own guidelines and rules and insure the mortgage only if their conditions are fulfilled more over now day are they are also very strict. They are their changing their rules from time to time keeping in view the market trend.
    If the prices of the real estate exceptionally fall other Global investors will take advantage of this and will starting investing in Canada and the falling of prices will be checked.
    There is no doubt that economic cycle is there and is goes up and down over a period of time .But it would not happen to fall 30 % prices of real estate as report of Madani says .
    I live in British Columbia and house are being sold in Vancouver like a hot cake and with a higher prices . From the last 12 years I am in this business and have never seen that prices has gone down steeply .

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