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Canadian Real Estate prices only have three main directions they can go: Up, flat or down.

Now that we have gotten that out of the way, this article is about what happens if they go down. It is not a prediction, but just trying to paint a picture of just what might be in store for Canadians — and outlining things you can do today to protect yourself.

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For the sake of excitement, let’s say that there is a solid decline of 25 per cent from today’s prices. It can certainly happen.

From 1989 to 1996 Toronto average home prices dropped 36 per cent.

In 1980, Vancouver average home prices dropped over 40 per cent within one year.

But is the worst of your trouble simply the drop in value of your house?

Unfortunately, that is only the biggest of a long list of worries if we face a major house price decline. These would likely include: