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How would a correction affect your home's value?

Bulletin for homeowners: House prices can fall. It’s happened before and, after years of strong price gains, it could happen again.

See what a downturn might look like for you over the next five years by using our Housing Correction Calculator. You can also use the calculator to check out what five more years of price gains would look like. Market numbers are shown going back to 1980 on a national average basis and for five big city markets across the country. The numbers shown here do not reflect the impact of inflation.

My home is worth:

After a 25 per cent correction, it would be worth:

That's a difference of:

Tip: Use the buttons above the chart to adjust the correction.

Correction: Growth:

Is a big correction realistic?

Here, we see average home prices for different major housing markets going back to 1980. Cycle through these cities to see the largest corrections that occurred over the past several decades. You can also see what a severe correction of 25 per cent would look like.

Toronto’s largest correction happened between 1989 and 1995, when home prices plummeted by 23 per cent. This decline followed a period of rampant price speculation in the Toronto market. Vancouver’s market has been highly volatile over the years – big gains, but also notable declines. Calgary’s market depends to a large extent on the health of the energy sector. You can see the energy industry’s struggles of the early 1980s reflected in the slumping real estate market of that period.

Avg. price:
Average housing price
Projected -25% correction

How do mortgage rates affect the housing market?

Note how the housing market’s big run since the mid-1990s coincides with a long decline in mortgage rates. There’s little room for mortgage rates to fall further in the years ahead; much more likely is a slow, steady rise in rates. Shown here are posted five-year mortgage rates, as tracked by the Bank of Canada.

Average five-year mortgage rate
Average Canadian housing price