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.

oldest most voted
Inline Feedbacks
View all comments

So far in May, 2012 vs 2011

Sales: down 20%
Lists: up 12%
S/L ratio: 40% vs 56% (down 16%)

Hot Vancouver

@loser with the girls: The most interested thing is that Oil goes up on the step ladder like $.50 or $1.00 through small loss and small recovery but, It fall in two or three shots by large percentage.These quick slides does not help the downers.It means the leg up is short coming ahead.Greece is good once in a week but nobody buy Greece twice in a week.The market goes up by force.However,This time there is nothing even supporting so the market most likely to stay stagnate with short reverse and short recovery till end of year.I think the only thing that will run daily real estate is to choose between renting and owning a place to live.if the listing flood level kept on increasing, it will take the cost to rent too high while inflation level will freeze as it… Read more »



“The Krugmans of the world would see us lurching from bubble to bubble because they have an almost religious belief in the power of the govt and Fed to pull levers that fine-tune the economy.”

Very well put. I’ve been thinking along those lines for years, but you’ve condensed it into one sentence.


Richmond Detached + Attached

09/30/2008 = 2639 Peak

05/14/2012 = 2656

Richmond Detached

09/30/2008 = 1012 Peak

05/14/2012 = 1102

Vancouver West Detached

09/30/2008 = 1053 Peak

05/14/2012 = 1014 almost there…

Most areas are not there yet…. like Vancouver East

Vancouver East detached

09/30/2008 = 1080

05/14/2012 = 558

data junkie

@CMHC hater: The funny thing about the Federal government being a counterparty to your debt when you’re a federally-regulated company is, don’t expect a reach-around.

I promise you, even as the Feds are shelling out for all the MI they’re on the hook for, they’ll be drafting a nice piece of legislation to ensure the banks take a ten-foot barge pole right in the delicates. There’s absolutely no way the banks walk away from this scott-free when all it takes is a stroke of the pen from the government to squeeze all the blood they can out of those nice juicy preferred shares Garth is pimping like an idiot.


@Devore: The “long term” argument has to do with the buyer eventually paying off the mortgage, which is fixed (+/- interest rate diff) at which point you’re left with only operating costs, Which is a fallacy, because it’s based on ignoring the opportunity cost of the accumulated principal payments, which matches the decrease in cash interest paid. The interest cost does not change over time, except if the interest rate itself changes. The best way to see this is to look at an amortized mortgage as a line of credit equal to the cost of the house, on which you pay only interest, and a savings account which has the same interest rate. The principal payments, which are not an expense, go into the savings account. The interest earned on the savings account partially offsets the interest which has to… Read more »

CMHC hater

dunno if this is posted–cmhc-mortgage-insurance-may-be-reduced-by-feds

“Should the borrower default, the insurer pays the outstanding balance, up to 18 months of accrued interest, plus foreclosure and maintenance costs.”

This means we are screwed royally, even foreclosure and maintenance costs are bourne by taxpayers. Good luck with banks relenting when shit hits the fan.


HAM attitude at its best, although at home but could happen here like car racing for example.

Romeo Jordan

Respectfully … Rosenberg is only half correct. The same inflationary forces that drive gold to $3,000/oz will drive world equity markets higher. The DOW and S&P will make new highs by December 31, 2012. The great inflation is about to be unleashed … all asset classes are about to go on a significant rally. Bernanke has to create the illusion of growth … this will be done by propping up equities … which will increase corporate and personal spending. Equity markets will not be allowed to crash!!! If they do, we are all friggin’ doomed as corporations and consumers go into a shell and hunker down with their spending. The DOW, worst case, will fall to 12,000MT this summer. This will allow the fast moving averages (50/100 days) a chance to roll over and converge with the 200/300 day moving… Read more »


@Huh?: “Krugman has no vested financial interest in a real estate bubble. The other two guys are RE Industry spokesmen. Of course, you need to use a minimum of critical thinking a elementary bias identification when you read the paper.”

Ok, how about Tsur Somerville and Tom Davidoff. Do they have vested interest in a real estate bubble? It’s not necessarily that easy to tell just from looking at their affiliations.

Romeo Jordan


Given how we are of the view that the market is softening, I’m still surprised that MOI has not breached 7 on it’s way to 10.

Any thoughts on the future direction of MOI?


Total days	22		
Days elapsed so far	10		
Weekends / holidays	4		
Days missing	0		
Days remaining	12		
7 Calendar Day Moving Average: Sales	142		
7 Calendar Day Moving Average: Listings	310		
Sales so far	1329		
Projection for rest of month (using 7day MA)	1709		
Projected month end total	3038	+/-	498
Listings so far	3304		
Projection for rest of month (using 7day MA)	3720		
Projected month end total	7024	+/-	499
Sell-list so far	40.2%		
Projected month-end sell-list	43.2%		
Inventory as of May 14, 2012	18182		
MoI at this sales pace	5.99		

Sales slipped over 3K projected; listings now just above 7K projected.

Romeo Jordan

Loser with girls, hang on to your panties, stick your thumb in your mouth, and relax. Breathe.

Patiently Waiting

@Jimmy Hat: “another couple offered $150 but they ended up giving it to me because of my good references – maybe they were full of it. Who knows?”

Wander onto a car dealership lot and see what carnivorous creature latches onto you. That thing will be more ethical than your standard realtard.

Was there a realtard in any way involved in your transaction?

In the clip, those kids brought along a realtard from Lamb’s agency. Hopefully, lube was included.

Upside is, even if you overpaid $50/month, you could renegotiate within a few months or a year, so damage was limited to a few hundred dollars. A relatively painless cherry pop. Like mine, when I signed a cell phone contract in University. :S

loser with the girls

TSX hit 2012 low, DOW down 8 of last 9 days, europe entered double dip
i am afraid that we are entering phase where wheels are coming off


“You act as though there is a single ‘media’ voice that tells you exactly what you should do and then you’ll be rich. Don’t you see how silly and absurd that position is?”

You can gauge the overall mood or the “on balance” MSM opinion. Clearly that “on balance” opinion is bearish now. Clearly that “on balance” opinion was bullish for the last 10 years.

Are you denying the above two statements?



“What? This makes no sense at all, at any point in any market cycle there are two things you’ll be able to find in the Mainstream Media: Calls to buy and calls to sell.”

You don’t think that MSM is overwhelmingly bearish overall right now? May be you need to practice your ability to gauge the overall mood of the MSM.


@Broken Clock: The mainstream media is overwhelmingly bearish. If you were an attentive idiot, and simply sought information and did what you were told, you would be rich. What? This makes no sense at all, at any point in any market cycle there are two things you’ll be able to find in the Mainstream Media: Calls to buy and calls to sell. You’ll find both opinions often in the same paper on the same day. Are you trying to say that people shouldn’t do their own research (follow the herd) except that they should research who is making the call so they know whether or not it’s a good one? I’m sure you can go through newspaper archives and find just the right call made at just the right time, whether it’s for or Bear Stearns. And you know… Read more »


New Listings 268
Price Changes 168
Sold Listings 150



#39 @Broken Clock: “The mainstream media is overwhelmingly bearish. If you were an attentive idiot, and simply sought information and did what you were told, you would be rich.”

I think this is more a comment on the influence of the MSM than anything else. The best way to predict the future is to create it. Are Canadians the most gullible and naive people in the world? Almost:

Jimmy Hat

@Patiently Waiting

“Are the SHEEPLE so stupid as to believe this crap about rental bidding wars?:

This actually happened to me. Property Manager low-balled listing and solicited bids saying that multiple people wanted the unit. I ended up going up $50. According to the Property Manager, another couple offered $150 but they ended up giving it to me because of my good references – maybe they were full of it. Who knows?

My 3rd apartment in two years as the first two panicked and sold.


In case anyone is wondering what happened to HAM:



Yes it does because transaction costs over a longer holding period are less significant ie property purchase tax to buy and real estate commissions to sell.

Fair enough – transaction costs can certainly make your investment horizon relevant.

However it is precisely because they are less significant over time that my point is valid. Eventually interest costs overwhelm transaction costs in percentage terms, which makes transaction costs mostly irrelevant after several years. And the article specifically stated that it’s better to buy than rent if you plan to hold longer than 15 years, which is bollocks.

After 15 years, total interest cost is so much greater than realtor’s commissions that it renders transaction costs essentially irrelevant thereafter. Try creating a buy-vs-rent model in Excel and you’ll see what I mean.


@Yalie: ‘The only thing that matters is whether the money you save from renting grows faster than the value of your home equity over a given time frame. That’s the very definition of the phrase “renting makes more sense than buying”.’

Most people don’t save the difference between renting and buying. They have a monthly budget for shelter and make a decision on where to live based on that. That is to say the renter probably wouldn’t live in the same place if they bought – they’d live somewhere either smaller, or in a different location. I doubt many could even afford to buy the place they currently live in, let alone make a conscious effort to ‘save the difference’ and stick to it.

Patiently Waiting

Are the SHEEPLE so stupid as to believe this crap about rental bidding wars?:

Sadly, the answer is YES. But it can only have so much affect without the speculative component (which is the case with real estate).

Eventually, the SHEEPLE will wonder why other renters in the same building are paying way less than them. The upside is this may make them more wary of the lies of realtors and whorish “journalists”.

Shame on you CBC. Shame, shame, double shame, I hope Harper slashes you to pieces (and this coming from a lefty).