BC to see steepest price drop in 2009
The Canadian Real Estate Association has just released an updated housing market forecast and predicts that next year BC will see the steepest house sales price drops anywhere in Canada.
The association predicted a 7.8 per cent decline next year in the average residential sales price in B.C., compared to a 2.1 decrease across Canada.
Average price is forecast to reach new heights in six of 10 province in 2009, but B.C., where lower sales activity is expected, will continue to weigh on the national average price, the association said in a news release.
The association is forecasting an 11.7 per cent drop in sales activity in B.C. for 2009, compared to a three per cent drop across the country.
Hat-tip to Richard for the story link.
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November 16th, 2008 at 8:52 am
These stats the CREA are sending out is a joke. They clearly have an incentive to paint a rosy picture. I guarantee they will have new downward forecasts come 2009.
Vancouver is one of the biggest real estate bubbles in North America. The average condo in BC costs 30-50% more than the average condo in Toronto, while Toronto wages are easily 30% more. Most of all despite interest rates currently still decreasing, give it 12 -18 months once the market stablizes and inflation becomes an issue again and the govt hikes rates. There will a tonne of people selling their condos as the their mortgage payments spike.
Right now the average condo in Vancouver requires a 50% downpayment in order for you to have a positive carry over 15 years. That is insane. When you get a positive carry for 30% down than its probably worth considering to buy. However, that would suggest that prices need to decrease 25-35% which I think is not out of the picture. I know a lot of people are waiting for a drop and looking to pounce on the market to get in. However, even if you are able to get in at a lower price, the market won’t run back up to its previously levels probably for 5-6 years.
Don’t get me wrong I think real estate investment in Vancouver can be very profitable, but the spike we have had in the last 5 years has been overdone. One thing that we won’t see probably for a couple of decades is a situation where interest rates are low, along with low housing prices. We had this condition in the late 90′s and early 2000′s mainly because the US govt kept rates low and Canada followed suit to continue strong economic growth and look what it led too. Luckily our banks were more conservative and weren’t dishing out $500K mortgages on zero down.
November 13th, 2008 at 6:51 pm
C-mon, real estate in Vancouver is depreciatiating faster than your 2008 automoblle. I am a realtor and agree with most of these posts. Realtors and sellers in SELF DENIAL. Phantom wealth that cannot be accessed, my house is worth only WHAT? YES! Gord Campell freezing tax accessed values at their PEAK? Wake up NOW before its too late.
If you need too sell, be smart and take any realistic offer!
If you do not have to sell, it doesn’t matter. Live and let live.
Yes like today, Vancouver is an amazing place to live, but, affordibility will make it more amazing, the real estate free for all is over,think and look long term! Your home is going to be your home and not an atm machine.
Nice to see ridiculous incomes unsubstantiated,beautiful girls taking orders in pre-sale centers making stupid incomes. Where is that money coming from? GONE NOW
November 12th, 2008 at 4:03 pm
Future headline (?)
” Empty condos or empty condo buildings rented cheap by desperate owners(banks?)and used for Grow-ops and meth labs ” ?
November 12th, 2008 at 3:50 pm
“15. BC Bud
Executive summary: BC is toast. Gordo bet BC’s economic future on continued high consumer spending and perpetually rising RE prices, and has rolled snake eyes”
I was thinking the same thing. We have also had another bubble in bc no one has talking about. BC bud. I know crime goes up during recessions but i think it will be petty crime and violent crime once these marijuana pimps start feeling the squeeze they will have to start eliminating their competition.
November 12th, 2008 at 2:46 pm
If you look at the housing price chart adjusted for inflation, 1982 prices (last real boom and bust) were not reached again until 2006. That’s 24 years. Historically RE downturns are twice as long as their run-up in prices.
I love how they have flipped fear. Fear was one of their essential components in creating this bubble. Now that fear is against them, it’s time to ignore it. Remember the “buy now or be priced out forever” mantra?