However, this decade also saw the setup of the housing market for a future crisis, with pieces being put into place at the Federal Reserve and throughout the banking system. The decade of the 1980s has traditionally been viewed as a time of strong economic growth and innovation, mainly due to the smaller government, pro-deregulation policies of the Reagan administration. In August, the Canada Mortgage and Housing Corp (CMHC) forecast average housing prices in Canada to decline by 21% from $586,000 to $460,292 in the first quarter of 2021. Although the effects on Canada were milder than on the United States and in Europe, the Canadian recession of 2008–09 was still severe enough to generate sharp declines in output and employment and to require significant responses by Canadian policy-makers. Repossessions are up. 1982: Average house price in Canada. Toronto's current real estate boom shares one thing in common with the red-hot housing market in the late 1980s, recalls real estate veteran Karen Millar. Let's look at the Canadian real estate market. Like Canada, the early 1980s recession in the United States technically consisted of two separate downturns, one commencing in January 1980 which yielded to modest growth in July 1980 with a deeper downturn from July 1981 to November 1982. 1982: Average five-year fixed mortgage rate (March) … Crash course: What we learnt from the 1980s House prices are falling. Last month, I had written an article warning investors about a massive crash in Canada’s housing market. Housing Market Crashes From 2010-2020. @BenRabidoux of North Cove Advisors sends along this index chart which shows the real (inflation-adjusted) price of homes in Canada going back to 1956, so not using U.S. data prior to 1990. The last ten years have been characterized by a journey to recovery for the real estate market. One cause was the Federal Reserve's contractionary monetary policy, which sought to rein in the high inflation. The financial crisis of 2007 to 2008 is considered the worst since the Great Depression's wave of bank failures. $439,100. Although the causes of "Black Monday" were complex, many saw the crash as a sign that investors were worried about the inflation that might result from large U.S. budget deficits. 19.4%. Considered to be one of the biggest economical declines since the Great Crash of 1929, the 2008 housing market is still having palpable effects on the economy that are being felt today. The consensus is that the next time home prices fall, it won’t be like 2007-2012. 2015: Average house price in Canada. The global financial crisis that began in 2007 dragged much of the world economy into recession, and Canada was not spared. Is the real estate market 2021 going to crash? No one, however, seems to be talking about what the next real estate correction or bust might actually look like.