Better Dwelling
RBC Risk Model Shows Canadian Real Estate Prices Can Fall 30%, No Growth Expected
Canada’s largest bank doesn’t see much happening in real estate over the next year. RBC risk models show the bank expects almost no price growth over the next 12 months, and modest growth at best. At worst, the bank sees a 30% drop in home prices and 18 months of deteriorating conditions.
Base And Alternative Scenario Forecasting
Under IFRS 9, institutions need to prepare three forecast scenarios: a base case and two alternative scenarios — downside and upside.
A base case scenario is your working assumption. Not too hot, not too cold. Little out of the ordinary occurs, such as monetary policy missteps. The CEO of the bank recently criticized the central bank, so it’s hard to see that happening. That’s how they defined their base case.
MORTGAGE PAYMENTS TO GROW EXPONENTIALLY
PREPARE FOR SUPER-INFLATION
