Canadian house prices would drop 26 per cent on average if oil fell to $35 a barrel and stayed there for five years, says the CEO of Canada Mortgage and Housing Corp.
Evan Siddall made the comment at an event in New York on Monday, where he shared with his audience the results of “stress tests” the CMHC ran on Canada’s housing markets.
In this scenario — $35 oil leading to a 26-per-cent house price decline — unemployment would rise to 12 per cent, Siddall said, as quoted at Bloomberg.
West Texas Intermediate, the benchmark price for North American oil, was trading around US$44 as of Tuesday afternoon.
Most analysts today see little chance of a return to $100-per-barrel oil prices anytime soon, but few are forecasting prices to hit $35 and stay there for five years. The parliamentary budget office recently forecast oil prices would rise slowly over the next five years, to US$59 a barrel.
Evan Siddall made the comment at an event in New York on Monday, where he shared with his audience the results of “stress tests” the CMHC ran on Canada’s housing markets.
In this scenario — $35 oil leading to a 26-per-cent house price decline — unemployment would rise to 12 per cent, Siddall said, as quoted at Bloomberg.
West Texas Intermediate, the benchmark price for North American oil, was trading around US$44 as of Tuesday afternoon.
Most analysts today see little chance of a return to $100-per-barrel oil prices anytime soon, but few are forecasting prices to hit $35 and stay there for five years. The parliamentary budget office recently forecast oil prices would rise slowly over the next five years, to US$59 a barrel.
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