TD: Vancouver house price to drop $133,400

Sensational headline no? Here’s the deal: The REBGV benchmark price for a Greater Vancouver house is $901,680. TD Bank economists have just released a report in which they predict Vancouver house prices to drop by a remarkably precise 14.8% in the next two years. Based on the current benchmark price for a detached home that would be a loss of $133,400.

Now I know that for most of you $133k is nothing, but for some of us that’s real money.

“A combination of more subdued job and household income growth, rising interest rates, the recent tightening in borrowing rules for insured mortgages and fewer first time home buyers are expected to be the chief culprits behind the slowdown,” TD says.

Vancouver’s real estate market will fare the worst in the next two years. TD predicts a 25.4-percent peak-to-trough decline in sales and a 14.8-percent pullback in prices by 2013.

Of course everyone knows that different housing sectors drop at different rates and TD is predicting the worst carnage in the Condo market. What do you think will suffer the largest price drops – west side houses or east side condos?

Hat-tip to Real Professional for the link.

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space889
space889
9 years ago

@davers: they get it most likely from linear regression or monte carlo simulation. Plus the average Joe like precise sounding numbers.

space889
space889
9 years ago

20 homes in Vancouver around the average price of $800K:
http://www.vancouversun.com/business/average+home

davers
davers
9 years ago

Where the hell do they get these numbers from anyway? 14.8%? There is such a small chance of that being the actual number, it would make more sense to just say "Around 15%". But then that looks less professional and as we all know predicting the price of housing in 2 years is an exact science.

patriotz
9 years ago

@Patiently Waiting:

I’m not sure what you meant by the questions, or were you pointing to the now stagnant population growth?

Well sort of, what I meant is that there is only so much rental demand, i.e. so many people able and willing to pay so much money, which means that if present low end rental stock is replaced by higher end units, it does not mean that overall rents will go up.

Sort of like when the DTES hotels spent piles of money renovating because they thought they could get higher rents renting to Expo visitors and in the end the same old residents got nicer places for the same money because there was no one else to rent to.

Keeperofthederp
9 years ago

@jesse:

TSUNAMI

TSUNAMI

TSUNAMI

GHOSTS

GHOSTS

GHOSTS

15,000 years of 1st nations ghosts are all living under our feet! AIYEEE!

44444444444444444444444444444444444444444444444444444444444444

how's that?

jesse
9 years ago

@Mike: ix-nay on the unami-tsay… you know what happened to the Richmond market after the Japan thingy?

Mike
Mike
9 years ago

@Common Sense: Don't really want to get into it. I have nothing to gain or lose on this forum other than to tell you what's actually happening out there.

I am a huge real estate bear. I think this combination of mainland chinese buying and rock bottom interest rates has set off a financial and community catastrophe.

I'm just telling you it is real. Go to an open house in the West Side over the weekend and tell us what you see.

That said, I've also heard the tsunami of Chinese buyers has tapered off to some degree.

Romeo Jordan
Romeo Jordan
9 years ago

Market is going to get shitkicked.

Romeo Jordan
Romeo Jordan
9 years ago

LKS

I'm sure your a nice crackfrag, but frackoff.

You and I both KNOW that thousands and thousands of lower mainland fools are going to be busted out bigtime.

shed a tear, would ya!

xoxox

Romeo Jordan

Li Kai Shing
Li Kai Shing
9 years ago

@Romeo Jordan:

Quite swearing in church you fragcrack

Hey want to buy ticket for school play

MIT versus Harvard deathcage match !

Romeo Jordan
Romeo Jordan
9 years ago

No or else

this is the crash

it is starting now

buckle up you crackfrag

Li Kai Shing
Li Kai Shing
9 years ago

@Romeo Jordan:

Or else what ?

Li Kai Shing
Li Kai Shing
9 years ago

I tink Troll here

http://vancouver.en.craigslist.ca/van/m4w/2494771

He was star in Slingblade !

Romeo Jordan
Romeo Jordan
9 years ago

I warned you shitheads that the market would show cracks and then crash this summer.

So…here it is.

Enjoy.

xoxox

Romeo Jordan

Devore
Devore
9 years ago

So whatever happened to Troll, is he done ankle-biting people for trying to predict the future based on established economic theories and historical precedent? Maybe he can see the future, so has no need for the crude predictive tools of us mortals.

Here is an easy template for Troll:

Vancouver house prices in the next 2 years will [***decline/rise/be flat/Be Flat(tm)***] because [***provide theory/consult crystal ball***].

*Be Flat: +/-20%, give or take, registered trademark of Dave Enterprises.

Bubba
Bubba
9 years ago

Re Mainland Chinese Investment.

……..wasn't there a reported backlog of "investors" approved under the old rules ???

Bubba
Bubba
9 years ago

# 75 jesse Says:

July 14th, 2011 at 4:10 pm

: “Aren’t stuff like hot/cold water, etc covered by strata maintenance fee? Or is OV has that part individually metered and charging each tenant/owner that amount?”

It sounds like COHO is taking the approach that an overt user-pay system will make more efficient use of utilities than a fixed charge, akin to water and hydro metering. Not sure if the units are individually metered or simply metered at the source and divvied up afterwards.

My main point was that adding the uncertainty of untested utility charges will add uncertainty to how to price the units for sale and rent, and we all know how markets feel about uncertainty.

=====================================

aka Bend over…… and leave the driving to them !!!

Suckers….

Meters….License to steal.

bourgeoisie meat bea
bourgeoisie meat bea
9 years ago

what will happen to RE prices in Vancouver when US credit rating drops, and the loonie goes to $1.20US ?

Common Sense
Common Sense
9 years ago

@Mike:

"Over 80% of three recent large scale developments were sold to Mainland Chinese."

Do tell… which ones? Let me guess – it is confidential.

"I suspect that the real estate boards are intentionally not disclosing the offshore buying statistics because it would enrage the public and force reform."

Yes they are keeping it a secret by the flood of news stories on Global and the local rags where they continuously state mainland Chinese are driving the market.

Still NOTHING to back it up though. All a marketing ploy IMO.

paulb
9 years ago

New Listings 254

Price Changes 140

Sold Listings 140

Total Inventory: 16191

Website: http://www.laurenandpaul.ca

Bubba
Bubba
9 years ago

Two new high-rises planned for City Centre

http://www.bclocalnews.com/richmond_southdelta/ri

I call money laundering

Patiently Waiting
Patiently Waiting
9 years ago

@Mike: So two things are affected:

1) Pre-sales. Good, more supply and the risk isn't even being taken on by locals. WIN-WIN

2) Rich people's houses. Too effing bad, the rest of us were priced-out long ago and they didn't care. Supposedly rich people have political influence so they can change this if they want to.

Patiently Waiting
Patiently Waiting
9 years ago

@patriotz: The new supply is a weird mixed bag of rental condos and mortgage helpers. This makes long term rent comparisons difficult to reflect the real world as they apparently include mainly purpose-built rentals.

The rents on purpose-built units should go down in real terms. That 70s apartment was nice in its day but now it has 40-year-old decor and old appliances (usually of varying ages).

I'm not sure what you meant by the questions, or were you pointing to the now stagnant population growth?

Keeperofthederp
9 years ago

@space889:

don't strive to be a banana

just be a canadian

i am mortified going through these forums with google translate – there is a ton of stuff in here that is .. 'damning' to say the least.

yes they will be screen cap'd. lulz will ensue.

they sound like americans in 1928.

Mike
Mike
9 years ago

@Anonymouse: I don't need statistics. Without getting into details, I know a number of developers and as a result, realtors.

Over 80% of three recent large scale developments were sold to Mainland Chinese.

I suspect that the real estate boards are intentionally not disclosing the offshore buying statistics because it would enrage the public and force reform. Turn a blind eye all you like, but the Chinese are accounting for the majority of purchases in North Burnaby, West of Cambie and in West Vancouver.

Ask yourself if the average lawyer or doctor can afford a 1.7 million lot on the Westside? The answer is absolutely no.

Somebody is buying and it is not the people who work in the City and form the base of our economy.