May 15 2011 – Vancouver house prices have fallen for the 35th continuous month as the fallout from the global credit crisis continues to hit the metro area hard. In April the benchmark price for a single family detached home dropped an additional 9% bringing the year over year losses to 74%. The benchmark price for a detached home now stands at $47,034.
While prices have dropped dramatically across the entire spectrum of housing no market has been hit hard as downtown condos, where prices have dropped to zero and many speculators have simply walked away from their debt never to be heard from again. Supply continues to increase as some condo towers started during the building boom are completed, but many others have been abandoned by bankrupt developers in a state of partial completion.
The sad state of the downtown core can be blamed on a confluence of factors: the credit crisis, the exodus of jobs and population, multiple bank collapses, oversupply and the discovery of the unique health hazards caused by granite and stainless steel. The elimination of the CMHC and the requirement for 70% down payments certainly isn’t helping the local market.
While many speculators have been financially destroyed by this market, not everyone is unhappy with the collapse. Local teacher Sandy Ursus just bought three homes in Vancouvers southlands neighborhood and is quite happy with the purchase.
“The minute I saw this house I fell in love. We’ve been saving for years, but when this and the neighboring homes came on the market for a combined price under $200k I knew it was time to take my money out of the bank and buy” Ursus explains sipping champagne on her sunny deck. “Since we had the two neighboring homes torn down it’s almost like living in the country here. Its funny thinking that just a few years ago people were fighting to pay more than the next guy for a house in Vancouver while these days the seller will throw in a new car and a years worth of gas just to get you to buy.”
Is she concerned about predictions of further depreciation and economic woe?
“Not at all, this is a place to live, a place to raise a family, not an investment. We’re debt free and maxing out our RSPs so the price of the house is really not a concern for me.”
Local economist Rusty Summervile disagrees “She should really get rid of that house as soon as possible. History has shown that real estate is a massive wealth destroyer. The most sensible course of action is to rent and save as much as you possibly can, let someone else shoulder the depreciation.”