I think the answer to that is yes. So far we are seeing prices come down about 20% from peak February in the greater Toronto area as well as Vancouver. The bubble already popped imo.
One could make the argument that owning homes always beats inflation and this definitely makes sense. However, when home prices have increased by 50% in just 2 years and personal incomes have not even kept up with inflation then something doesn't add up. In a normalized economy, we would not be faced with supply shortages and increased construction costs which can partially explain the current situation. This is certainly true as supply decreases pushes up the price of homes but in a normalized economy, one in which inflation is not persistent, then an increase in supply would certainly be a deflationary force to the price of homes. I think it's going to take several years for the economy to normalize but I think this correction was long overdue.
This is not a good sign in the short term for the real estate industry in Canada. South of the border this is not the case for the US. The National Home Price index is still strong even though sales are slowing down. I think the US is lagging right behind Canada and that home prices will fall. I believe Canada is in a worse situation.
What does that mean for marketing services in the realty space? On the one hand, homes are harder to sell and may require additional marketing to close the deal. However, clients may be reluctant to list their homes in light of the higher interest rates. This is certainly true for homeowners on a fixed longer term mortgage. Overall, I would say it is not encouraging to be a real estate agent in Canada and any business tied to the industry. If agents make less money then everyone makes less money.
What I would like to see is for interest rates to normalize and inflation to be under control as well as home prices showing moderate growth. Only when this occurs will I feel confident about the general state of the industry.