BMO: Vancouver price drops for next 2 years

A Bank of Montreal report is predicting that Vancouver house prices will continue to fall for the next couple of years:

BMO Senior Economist Sal Guatieri says the price of homes in Vancouver and uncertainty over long-term mortgage rates are creating a buyer’s market.

He also says rich foreign investors who have driven up real-estate prices in Vancouver are now looking at cities that are less expensive.

“The sizzle is coming off the Vancouver housing market,” Guateri says.

Read the full article over at News 1130.

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midnite toker
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midnite toker

Vancouver, Selling the sizzle, not the steak since 1996!

rp1
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rp1

Since 1986.

rp1
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rp1

Saw this on jesse’s twit broadcast. Someone may want to get a copy of this book:

http://blog.ounodesign.com/2012/05/07/vancouver-ltd-by-don-gutstein/

registered
Member
registered

Wow, no sub-prime here:

http://www.youtube.com/watch?v=V_w-BSGtCeM&feature=player_embedded

Been out of town and don’t know if this has already been discussed, but few things more clearly demonstrate the extent to which the federal government interfered in the mortgage markets. And by interfere I mean divert your money straight to their pals at the banks in the form of risky loan guarantees.

pricedoutfornow
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pricedoutfornow

Just for two years tho, prices will drop! Because we all know that when prices drop they only go down for a couple years, then just keep going up again! Just ask any American, they know all about it!

jesse
Member

Missing a big part of the story, we are getting clues credit tightening is hitting Vancouver, and this is coupled with low population growth.

Watch the CTV story. Comedy gold.

The Leak
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The Leak

Hey BMO guy!!! We bears here could have told you that four years ago. It wasn’t rocket science. Follow the blogsphere. That’s where the real news is.

Happ Fortune
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Happ Fortune

Good sunny is here. Watch and learn sales increases and inventory go down. Will you finally learn lesson?

Anonymous
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Anonymous
pure heresy! This guy must be an agent of chaos send here to disturb the faithful and the righteous. He shall not succeed! The space marine chapter of RE/Van shall strike this heretics down. The rich foreigners all watched Winter Olymics, they all saw how high our public school education system ranked, they all know about the gorgeous weather. They want to be here. They know we have limited land, in fact there are no more under-developed waterfront properties in Vancouver (seriously, there are no more now). They know they have to get in here at the first chance they can, even if it means they have to borrow tens of millions to get in. Ok seriously though, given how high Vancouver prices are, a soft landing is unlikely to be in the cards unless we generate massive amount of… Read more »
loser with the girls
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loser with the girls

two weeks ago oil was $110, today is $94 and change
it looks like deflation in commodities started
not good for resource country like Canada

Not much of a name...
Member
Not much of a name...

Somebody must be paying attention at the Province newspaper. Price to rents are now being discussed in a simple full page graphic.

http://www.theprovince.com/news/Where+cheaper+more+likely+rent/6612302/story.html

CashedOut
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CashedOut

Did anyone catch the real estate/interest rate story on CTV on Friday?

Yet another example of the change in tone from the MSM.

I didn’t catch the full story but they were talking about a potential rise in interest rates due to the ‘improvement’ in the economy (positive jobs numbers). I fully expected them to say that interest rates were going up, therefore it’s a great time to lock in your rate and buy buy buy! I almost fell over when they said that with the potential rise in interest rates, we should see prices on real estate come down, so you might want to hold off on making that purchase!

Ironically, as an example of the booming economy, they interviewed some construction workers from a high rise condo in Vancouver or TO.

Makaya
Member
Makaya
@Not much of a name…: Price to rent ratio at 73 in West Van? No problem according to our RE experts: “Local real estate experts say the number is simplistic and doesn’t factor in other market drivers. Real estate economist Cameron Muir said if you’re on a tight budget, it is more affordable to rent the basement of a home rather than buy it. But he said the formula doesn’t take in the factors that drive the housing markets, including the emotional drive to own. And he said homeowners are usually better off financially than renters in the long run because of accumulated equity unless renters are disciplined savers. UBC professor Tsur Somerville said the ratio of 15 can’t fit all to-rent-or-buy scenarios because of variables such as appreciation, interest rates and other variable costs.” These guys should consider a… Read more »
gokou3
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gokou3
jesse
Member

@CashedOut: “a potential rise in interest rates due to the ‘improvement’ in the economy”

Read loser with girl’s comment. I don’t know much about it but it is a good point that a slowdown, particularly in Asia, would hammer hard commodities. That has implications for companies that are heavily into commodities, for job growth in those areas, and for knock-on effects in parts of Canada dependent on resources.

It would sure help manufacturing though.

Hyperventelator
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Hyperventelator
@The Leak: “Hey BMO guy!!! We bears here could have told you that four years ago. It wasn’t rocket science. Follow the blogsphere.” Yeah, but we were wrong. I’m comming to the distrubing realization that I would be significantly richer if I did everying that the Vancouver Sun and the MSM told me to do. If I bought when they said buy and sold now that they are saying sell, I would be a multi millionaire. I’m not sure that it pays to think for yourself. In the last decade, this is what I have learned: you make money by following the herd and getting out when the MSM tells you that the party is over. And make no mistake, the party is now over. Even the MSM says so. The blogs did not make me rich but the MSM… Read more »
Madashell
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Madashell

@loser with the girls: I would like to know why gasoline at the pump went up to $1.47.9/l???????? Are we getting fleeced like real estates here?

CashedOut
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CashedOut
@Not much of a name…: Love the article. Especially if it stirs up some fear and doubt in the herd. However, I have to question their methodology: It doesn’t seem to me that $960k place on the west side rents for $1498. Not clear from the footnotes, but it seems to me they took the average HPI for detached, TH and Apt. Then divided that by the avg yearly rent of a 2 bedroom suite (which would include basement suites, apt, and TH). I think it would depend on the rental stock mix in the neighborhood, but in a neighborhood like VanWest, you would include a lot of basement suites, and those wouldn’t be selling for $960k. For example, there are some duplexes on W16th and Cambie that sometimes come up for $3000. One was recently listed for about $1… Read more »
loser with girls
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loser with girls

Madashell Says: “I would like to know why gasoline at the pump went up to $1.47.9/l???????? Are we getting fleeced like real estates here?”

LOL…they are defending high gasoline prices on thin margins of refineries
but we know that is big BS.

Not much of a name...
Member
Not much of a name...

@CashedOut: I’m in NV and my price to rent works out to 47.

registered
Member
registered

16 Hyperventelator Says: “Yeah, but we were wrong. I’m comming to the distrubing realization that I would be significantly richer if I did everying that the Vancouver Sun and the MSM told me to do.”

How would that have worked out south of the border? Everyone’s rich at a bubble top.

Madashell
Guest
Madashell

Did anyone see Garth’s blog….

“Homeowners beware! Canadian banks may soon force you to requalify your mortgage at the end of every term, if your circumstances change… say you lose your job or get divorced, you could risk losing your home.”

Makaya
Member
Makaya

902 sqft for sale in downtown at the bargain price of “$588,888″…

I’m wondering who they are hoping to sell it to?

http://www.realtor.ca/propertyDetails.aspx?propertyId=11646988&PidKey=-562106568

Broken Clock
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Broken Clock

@fixie guy: Are you suggesting that it is hard to call the top?

Maybe it is for some, but obviously it’s no problem for The Vancouver Sun, The Province, The Globe And Mail, Canadian banks, Tsur Sommerville.

rp1
Guest
rp1

#21 @fixie guy: The funniest thing is when they advise first time buyers not to “time the market” when the market is high. Those are the only people who can (and should) time the market. It is impossible for sellers to time the market when it’s high. They can’t all sell at once, although it seems plenty will try.

Of course when the market is low the situation is reversed. Buyer’s don’t need to time, but sellers should to avoid selling at the trough. I think people understand that. They just don’t understand how to value houses.

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