The country's biggest bank reaffirmed its real estate forecast earlier this week. RBC shared its quarterly earnings report and expressed how they will prepare for the subsequent quarters. The bank's chief risk officer (CRO) explained that they are now placing and even "greater weight" on declining home prices.

Earlier this year, RBC adjusted their forecast for real estate prices. They had expressed an expectation for real estate prices to decrease to 7 percent at the national level, relative to peak. This was nearly double the fall they were anticipating at the beginning of the pandemic.

The bank had also brought up a noteworthy trend in leading markets. They now believe Ottawa, Montreal, Toronto and Halifax are on the verge of tailing this trend. Its forecast is consistent with the downturns from other major risk agencies, and non-lender forecasts.

RBC’s CRO sees, “house prices declining by 8 percent and remaining depressed until late 2023.”  He also added that they see the “unemployment rate at about 9 percent until March 2023.” This would then suggest a second wave of unemployment, or a post-pandemic augmentation, by reason of normalization.

RBC explained that with this scenario becoming more and more of a reality, an increase is delinquencies is expected. Early this year, RBC stated they were anticipating the rate of delinquencies to rise to 2.3%. This rate is expected to peak sometime next year, at 4 times higher than the peak the country seen over the last 30 years.