Finn Proschmann is vice president of the C.D. Howe Research Institute. In this article in the National Post today, he reinforces the RBC report we cited last week and the things that Scotia Bank and others have been saying about the housing market. There is a definite downward trend in prices and builds. We are still unsure how exactly a downturn like the one anticipated would affect renovations, but this may be the year we find out, as the predictions are almost unanimous. House prices have risen more than three times the rate of inflation. There is significant over stock in major cities, especially the condo market in Toronto. According to Proschmann, the “warning signals look uncomfortably like those of the days before the market implosion that brought the 1980s to a thumping, crashing close.”
I remember that downturn well. Renovations dried up fast. I was doing renovations in Parkdale (a Toronto neighbourhood) when it all came apart, and found myself turning back to framing to put food on the table.