Canada’s Housing Market Correction Has Begun. Is It a Good or a Bad Thing?

Summary of the publication

In a recent Economic Viewpoint, we argued that the Canadian housing market is in the very early stages of a meaningful rebalancing. The natural instinct is to interpret this as a negative. After all, Canadian households’ long-term finances inexorably revolve around the wealth they accumulate in the value of their homes over time. Yet the severe housing market imbalance in recent years encouraged risky buying, eroded affordability and exacerbated inequality in Canada. From that perspective, a real estate cooldown could be construed as reassuring news. So which is it?