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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Ben
Ben
11 years ago

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… Read more »

Richard
11 years ago

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… Read more »

NO -LYMPICS
NO -LYMPICS
11 years ago

Future headline (?)

" Empty condos or empty condo buildings rented cheap by desperate owners(banks?)and used for Grow-ops and meth labs " ?

ted
ted
11 years ago

"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.

Vansanity
Vansanity
11 years ago

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?

Drachen
Drachen
11 years ago

Brittanny From wikipedia, I disagree with some of them and they don't mention luxury goods but since "luxury" is a bit vague I guess it would just be more confusing than clarifying to mention it in such a brief list. During the depression the very high end luxury stuff did very well, partly because the very wealthy wanted to ignore the droves of poor people so they hung out in exclusive clubs/stores etc. # Medical Services / Health care # Pharmaceuticals # Necessities: food/grocery stores/chains # Cosmetics # Education # Entertainment # Home & vehicle repair & maintenance # Debt collection # Tax preparation / simplification (cf: tax avoidance) # Career/Job search/Life coaching # Energy * Electric * Oil * Gas # Security/Alarm services companies # Weapons industry # Insurance # Funeral homes # Air Conditioning/Heating # Plastics # Emergency… Read more »

Phil
Phil
11 years ago

"Peter Simpson is chief executive officer for the Greater Vancouver Home Builders' Association."

That says it all. Oh well, he's probably going to be unemployed soon.

readon
readon
11 years ago

He's right, of course, RE will bounce back. The question is timeframe. 2 years, or 10?

Aside from that, it's more the usual myths. I did like the bit where he says "experts have been so wrong about the economy", and then follows this up by saying "experts say we won't be affected like th US"…

It's "pick your own expert day", apparently.

blueskies
blueskies
11 years ago

Metro Vancouver’s housing market will bounce back

http://tinyurl.com/5tygfh

There is no modern-era precedent to these economic conditions, so fear is a natural reaction. Remember the fear surrounding the dawn of the new millennium, 2000? What happened? Nothing.

NO -LYMPICS
NO -LYMPICS
11 years ago

Christmas is just over a month away.

The Christmas season is "make or break" for a lot of businesses even in good times.

Prediction : The shit will hit the fan right after the New Year…ho ho ho? OH OH OH !!!!

patriotz
patriotz
11 years ago

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.

Brittanny
Brittanny
11 years ago

Drac – OK,that makes sense. What industries to you think will do well? Other than the security/safe industry.

Drachen
Drachen
11 years ago

Brittanny

Actually you're quite a bit off in your guesses. Strangely enough it's the middle of the road to expensive stuff that doesn't sell in a recession. Extremely wealthy people have enough assets to ride through economic troubles so the top end stuff will be fine. For example your #7 is, I believe incorrect. It's not the high end tickets that won't sell, it's the basic seats where people will cut back.

Brittanny
Brittanny
11 years ago

So, if 75% of the US & Canadian economy is consumer spending and most homeowners can not use their homes as a debit machines anymore, I would assume that the following industries are toast: (feel free to add to the list)

1.Jewlery

2.Starbucks (recently reporting huge declines)

3.Expensive restaurants

4.Expensive electronics (Circuit City in the toilet)

5.New cars (Ford/GM/Crysler in the toilet)

6.Ski Resorts (Intrawest in the toilet)

7.High priced tickets for sporting events

8.High end clothing stores (Most of Robsin Street)

9.Travel Industry

10.Hotel Industry

11.New furniture Industry

12.Spa Industry

13.High end hair salons

14.Any industry that does not provide products at a resonable price related to food,shelter and clothing.

bdk
bdk
11 years ago

Todays Vancouver Sun says Vancouver Condos are going to be hit hardest.

who knew?

http://www.canada.com/vancouversun/story.html?id=

patriotz
patriotz
11 years ago

Given the RE market collapse, and if the drop is say 20 % next year, that would imply the fund could lose $500 + Million in asset value.

Actually it doesn't. Since the assets are not marketable, they can only be valued by the present value of the income they return, i.e. fundamental value. They cannot be valued at the current market price of comparable properties.

NO -LYMPICS
NO -LYMPICS
11 years ago

Gary Mason's latest story (Nov.12, 2008) on the Vancouver Olympic Village

TITLE: " When politicians treat voters like bumpkins "

Ghttp://www.theglobeandmail.com/servlet/ArticleNews/TPStory/LAC/20081112/BCMASON12/Columnists/Columnist?author=Gary+Masonary Mason latest article re Olympic Village

Drachen
Drachen
11 years ago
NO -LYMPICS
NO -LYMPICS
11 years ago

Re Millenium: I see that tag team of ex Vancouver Mayors Phillip Owen and Larry Campbell have parachuted in to back up the current Council. That should concern us even more when we see a "non -partisan" circling of the wagons. Seems more like a kool-aid reunion. Now they want to go on a witch hunt and find who leaked the documents to deflect attention and make it look like Vancouver Council was in the right and were the victims(?). The leaker should get a medal. The only benefit was that perhaps Vancouver's Property Endowment Fund (PEF)has been exposed as simply a creative accounting shell game. The PEF assets have been tabulated but very little of it has any liquidity. They claim the fund has a value of over $ 2 + Billion, but most of that is locked up… Read more »

Alexcanuck
Alexcanuck
11 years ago

Could also be "Patsy-otic" and use it as DP on a presale or two at 10% off!

Alexcanuck
Alexcanuck
11 years ago

Oops, don't know what evil force took over there.

Should read "patiotic and spend it", of course!

Patriotz, you vewy, vewy, bad person to wish economic collapse on those poor but happy consumers!

Alexcanuck
Alexcanuck
11 years ago

From Phil's link 131.

Our beloved leaders CAD bank bailout is now tripled to 75 billion dollars! Take off a few children, poor, seniors etc I doubt we have as many as 25 million taxpayers in Canada. So that's $3,000 EACH to bailout "the strongest banking system on the planet"?

And we're supposed to believe these jokers when they say "don't worry, be happy"?

Bold prediction here: Before Christmas we will an "economic stimulus plan" to put some (borrowed) dollars in our hands with a plea to be patriotzic and save it!

dd
dd
11 years ago

Vanman: I'm not falling for anything (I hope). That's why I point out things that most people would not know, hearing "Buffet says buy American stocks" and believing it or acting on it. Those points are the other side of the story to what the media presents, and were the result of reading many sources and following up with research on public documents. May 3, following the Bear Sterns buyout, was WAY early. Public statements like that reassure the vast majority of people who don't actively manage their investments, and many who do, which is why presentation of alternate viewpoints should make them stop and think. Other than that, and your jibe about not being a card-carrying member of the Berkshire club (my due diligence happens before I buy and receive some vcr manual), I don't see anything else in… Read more »

blueskies
blueskies
11 years ago

re: Van Sun story:

from the comments section:

ONWARD AND UPWARD

Wed, Nov 12, 08 at 01:51 AM

At least the Millenium development at False Creek is safe. Lots of presales and the development will sell out quick for top dollar. We are the best place on earth. Real Estate is very cheap here compared to other world class cities

the ol' "koolaid" enema trick…..

seems to still work!

Phil
Phil
11 years ago

And Canada's bank (CMHC) bailout is well underway!

http://tinyurl.com/5rp9a7