Almost every housing prediction was wrong

It’s no wonder Canadians are suffering from forecast fatigue

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by

From the February/March 2015 issue of the magazine.

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For the last six years, Canadians have been plagued by constant predictions of a housing crash coupled with dire warnings that homes are overvalued by 21% to 35%—and yet, year after year housing prices keep going up, as we show below. Take last year, when prices increased by 6%, despite the Bank of Canada forecasting a possible 30% market correction. Or go back to 2010, when prices increased by 6.8%, despite the Economist predicting a potential 25% correction. All of this is enough to give anyone forecast fatigue—but homeowners in it for the long haul really won’t be impacted by the last few years of rapid appreciation or an impending correction. Instead, just focus on prudently paying off your mortgage.

housing prediction

 

2 comments on “Almost every housing prediction was wrong

  1. notice how the forecast numbers look similar in the chart. It seems they all were pretty consistently wrong.
    However these forecast numbers were able to create a sense of panic, fear & sense of impending doom.
    As always I urge you to spend some time to learn Realestate fundamentals do that you raise above masses & make an informed decision for yourself.
    Good fit those who stayed vested in realestate despite of the panic.

    Reply

  2. I’m just curious on what the source of the numbers like 6.8% and 6% in the “What actually happened to house prices?” section. They look very inflated and misleading.

    http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/manuf12-eng.htm

    According to some numbers I crunched from the above link from Statistics Canada, overall housing prices increased at about 2.23% on average every year in the last 5 years.

    Also in one of your articles, you mention that “homes appreciated at a historic norm of 2% in value per year”
    http://www.moneysense.ca/property/buy/should-i-buy-a-house-now?preview=true&preview_id=106564

    Reply

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