Since you asked mait twice, I don't think he has much study in Canada, I will try to answer. But as the RE is highly localized, I am only following up Vancouver, or even much smaller, Metrotown in Burnaby, and North Burnaby. For Toronto market, you can read 枫下觅巢 of rolia.net. A few months ago, people debated about how much the price would drop, but now all postings are about what to buy.
For Vancouver, I don't think it will have big drop. Reasons are as below:
1. Money from China to purchase the properties that meet Chinese's expectation, which is small street, south/north facing, big lot. 6500sgft lot with old timer can sell more than 80W within days in the areas I looked at recently because there is simply no such properties at all. In summer, the price was 75W, and 80W would not go so easier, but now as it is for 80W to shine. Recently, there is a property with asking price 1.08m, 64*139 duplex lot, I was hoping it could last one month, then I could snap it with some discount, too bad, I was wrong, it was gone within one week.
2. Local purchasing power. As most Chinese came to Canada as immigrants with no local eduction, poor English, a lot of us ended up in labor work, RE is the only way out. And early immigrants from HK, Canton were the models. As result, a lot of these labor workers are doing much better than those people got professional jobs by investing in RE. This has big impact for the latter, and a lot of latter got their principle properties in early 00s, and they have money from re-financing their principle houses as down pay for second or third one.
3. Rental market. Now it is common pratice for people in Vancouver to rent out the basement. houses built in the last 15 years, even have two suites down stair, can bring in $1600, which means 40W worth of mrtgage payment (3.5%, 35 years amortization). If rent out the upstair for $1600, another 40W worth of mortgage payment.
4. Interest rate. As CAD is at par of USD, and seems will higher than USD soon, I don't think Canada can raise interest rate any more.
Please note, this is only my personal opinion.
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