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Prices drops: Vancouver leads the way

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News on the Canadian housing market is getting more bearish across the board: Reuters leads with the headline Canada’s Housing Sector Stalling, while over on the CBC it’s Average resale home price drops $3,500 in November. Thats the average drop last month in Canada, and though we’re still #1 for unaffordability in Vancouver, we’re also leading the way with the largest average price drop. November saw our number of sales decline by 21% while the average house price dropped by almost $29,000.

Thanks to ‘anonymous’ for the links.

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Van Housing Blogger

""Vancouver is just catching up to other cities in the world.""Wake me up when our incomes catch up to Thunder Bay, Winnipeg, or St. John's NL . . . [link]

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Uncertain Buyer

I have heard people say that, "Vancouver is just catching up to other cities in the world." when justifing the recent price increases.

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noturaveragebear

its seems that dublin is a bigger rip off than vancouver from those pics. But overrall I would say vancouver is expensive by even the most expensive cities standards.

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Pondering

Here is the million dollar house in vancouver:http://tinyurl.com/uzy2h

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Pondering

If you have any doubt whatsoever that the Vancouver RE market is overvalued, even by world standards, take a look at this survey of $1 million USD home around the world .My only regret is that they didn't include a Point Grey knockdown in the list.The difference being of course that our economy is nothing like these places. They have head offices

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rentah

If you have any doubt whatsoever that the Vancouver RE market is overvalued, even by world standards, take a look at this survey of $1 million USD home around the world .My only regret is that they didn't include a Point Grey knockdown in the list.

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Warren

That's a big decrease, although it seems like different news sources have different numbers for what constitutes "average". I've seen "average selling price" of anywhere from $450k to $750k for an area defined as "Vancouver". For my personal purposes, and I'm sure for others on this board, it would be really nice to get a more regionally detailed breakdown of area and type of dwelling being sold.That being said, I find it funny how the article still points out Royal LePage's prediction of a 6.5% rise nationally in 2007. With the 3 most expensive markets (Van, Tor, Cal) dropping, that should be interesting. 🙂

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Freako

"People put a lot of money and work into their homes and that increases value, why are you all so eager to take that away from them?"You utterly fail to grasp that RE prices is a zero sum game between current owner and owners to be. By "giving" to one you are "taking away" from the other. There is no net winner.Would you argue next that we shouldn't hope that gas prices go down because oil companies put a lot sweat into finding and extracting it?Prices will go where supply and demand takes them.Finally, you fail to see that price declines are apples to apples. If an owner did a major reno, his place may not drop as much, or may not drop at all.

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Anonymous

"People put a lot of money and work into their homes and that increases value, why are you all so eager to take that away from them?"Because that is PAPER value that is NOT backed up by fundamentals. If one day, there is a run on toilet paper, and a roll of toilet paper skyrockets to $1 million, all those giddy owners who own a warehouse of toiletpaper will start to buy 747s, yachts, etc. But should someone who owns a warehouse of toilet paper be spending so lavishly?No economy can be sustained by paper value in the longer run … if we are relying on the excess spending of "flippers" to sustain our economy, we are in big trouble.

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Tulip Mania

"why don't we just add prozac to the drinking supply. We would be the most powerful economy on earth."Or continue on with Greenspan's cure all,just keep printing more money, it's just as sane.

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Anonymous

Maybe they will buy one that drops $129k instead of one that gains $100k. If I was investing, how would I know the difference?Thinks like this just don't happen. While not all properties move exactly the same %, the whole RE market does move in the same direction.We're not talking the stock market where each company has its own earnings parameters. As for which properties are a good buy in Vancouver right now: none. You're welcome.

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wannaget2calgary

freako suggested "If you think the economy can operate sustainably on unbridled optimism, why don't we just add prozac to the drinking supply. We would be the most powerful economy on earth."freako, I think this would be expensive. I wonder what they do in the U.S.? They must have found a cost-effective solution down there that kept them going so long, and that will keep them in denial for quite a while yet.

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Anonymous

d_osh said…Before you scare everybody away from investing here, you should be more clear: That was a $29k drop as average, its not like every property in Vancouver dropped $29k in value. I'm sure some even went up in price.I don't want to scare anybody intentionally, and I agree that not every property dropped $29k. I agree that some must have gone up in price. But I'm worried that uninformed investors won't pick the right property to invest in. Maybe they will buy one that drops $129k instead of one that gains $100k. If I was investing, how would I know the difference?

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Anonymous

>>> If the newspapers started running stories with all the negativity you find here it would be bad for our economy and I don't think anyone wants that.choke, snort, guffaw…I'm sorry, but that's got to one of the top ten lame comments that circulates with the 'bulls'.They like to pretend that everybody sat down and voted for this insanity. They like to call it 'optimism'. Whereas, anybody that wants to see a return to fundamentals is considered a 'pessimist'.Bulls are smart like stumps.

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Freako

"Before you scare everybody away from investing here, you should be more clear: That was a $29k drop as average, its not like every property in Vancouver dropped $29k in value. I'm sure some even went up in price."As HB already alluded to WTF? I am equally sure that some dropped 58K in value. It is called an average. "If the newspapers started running stories with all the negativity you find here it would be bad for our economy and I don't think anyone wants that."It ain't bad if it is the truth. If you think the economy can operate sustainably on unbridled optimism, why don't we just add prozac to the drinking supply. We would be the most powerful economy on earth.

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hibernating bull

d_osh, if you actually believe the stuff you just wrote, then you're either in complete denial, or simply living in a fantasy world.29k average is exactly what it means. You say that some places may even have gone up in value, but that just means other places had to drop MORE than 29k to compensate. For example, take two houses. If house A goes up 10k, then house B has to go down 68k for the average drop to be 29k. You can't just hide behind the +10k house and pretend everything is great.People put so much money and work into their houses, so they should always go up in value? No, that's not what we've been seeing the past few years. It's been like this: RE industry making people feel ENTITLED to price gains, people flipping condo assignments with… Read more »

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d_osh

Before you scare everybody away from investing here, you should be more clear: That was a $29k drop as average, its not like every property in Vancouver dropped $29k in value. I'm sure some even went up in price.If the newspapers started running stories with all the negativity you find here it would be bad for our economy and I don't think anyone wants that.People put a lot of money and work into their homes and that increases value, why are you all so eager to take that away from them?

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digi

It is interesting that this is news elsewhere, but not so much in Vancouver. You have to wonder how much of an influence those RE advertising dollars and 'free condo' contest perks affect reporting of this subject in the local media.I think the idea that prices 'only go up', this time its different, and 'RE is a great investment' has a lot of inertia here. Every report on the subject is backwards looking and the average person isn't hearing that prices dropped by about what it would cost you to live rent free for TWO YEARS, they're hearing about Fred who bought an assignment in future leaky towers II and made an easy $20 grand flipping it on craigslist.This is why house prices crash slowly, it takes a while to work out the balance of fears: Losing money, or Losing… Read more »

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Anonymous

When I came across the same info, I was surprised to see that these numbers (quite significant in my opinion) hasn't been plastered all over the news. Then again, it's not in the best interest of the mainstream news to report it hence they choose not.Personally, I hope the numbers hold merit and that it is an indication of bad time (or good for bears) to come…

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betamax

I posted those links anonymously earlier as I had problems logging in.Seems like pretty big news to me; I'm surprised more people aren't talking about it…maybe they're away from the keyboard this weekend? On Ben's blog, one poster responded by saying: "Wow! Vancouver’s bubble has popped big time."And yet, no one in Vancouver has even seemed to notice…weird. It's as if we're so confident that Van is immune to a downturn that these new stats are simply ignored. After all, we have the best weather in Canada…

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