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"Remember, prices don’t have to drop, they just have to stop going up a lot. "

It's a given you are talking your book and mainly are focused on housing prices and affordability, but you ignore "reality" at your own peril. Unless Canadians have had a 8+% increase in income, their "real" (inflation adjusted) cost of living went up and their ability to afford housing went down when you consider the pre-tax earning needed to cover the 6.x% inflation in the last year.... and the next year. And every bit of continuing inflation is added to that burden and the need for incomes to climb if living "affordability" is to return to the already high 2021 level.

Yes, because without that 9% pre-tax raise the TTMonths of inflation still eats away their buying power and that % increases every year, minus an increase in income.

Obviously, the Bank of Canada is NOT supposed to focus on just Home Purchasing in setting rates. In fact, if the BoC tried to encourage a healthier economy it would regulate rates to encourage more healthy economic sectors (despite the Govt. of Canada attacking extractive and agricultural businesses that traditionally were the drivers of the economy). It would be healthier for the country for Real Estate to not be the main driver of prosperity.

I have a simple test to suggest for whether the real estate market is sick: the percentage of non-contingent purchase offers for non-New homes. And I am not talking about financing contingencies.

The Canadian Housing Market was sick at the top and it is still sick because chronically low interest rates since 2009. excessive Govt. regulation, & immigration rate in excess of essential goods and services has encouraged a FOMO mindset and destroyed traditional Canadian prudence.

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