It seems like one of these bank economist forecasts come out every week, but TD is calling for a 15% decline in house prices here and in Toronto over the next couple of years.
“There have been growing signs that the markets have been tilting towards excess supply of new multiples,” the bank said.
Indeed, condo prices in both cities have shown signs of slowing down much more than the price of single-family homes, the usual benchmark of a market’s overall health.
“In fact, looking at the trend in condo prices, you can see there has been essentially no increase in prices since the federal government first began tightening mortgage rules in mid-2008,” the economists said.
So if the average selling price on a Vancouver single family home is already down 12% year over year and the outlook for condos looks worse… maybe not the best time to buy a presale condo eh?
Well, there’s a change in the air when it comes to Vancouver Real Estate. The ‘can’t lose’ investment is starting to look like the ‘must lose’ investment with reports of buyers walking away from deposits and waiting for prices to keep dropping.
“It happened twice in the last month. One [deposit] was $75,000 and one was a $20,000 deposit, the guys just walked away from it,” said Mr. Arora, who runs Oneflatfee.ca in Surrey, B.C. “They are going to wait it out. So they lost $75,000 and $20,000, but if the market comes down $150,000 on a $1.5-million house, that’s not uncommon.”
Vancouver’s once-overheated housing market has cooled sharply, with the average price falling nearly 10 per cent in April from a year ago to $735,315, according to figures released Tuesday by the Canadian Real Estate Association. That was the largest drop since the recession and it marked the fourth decline in the past five months.
In a market once famous for being overheated, Mr. Arora said he hasn’t seen a bidding war in months. “It’s totally a buyers’ market. Buyers are determining the price,” he said. “And sellers are surprisingly accepting it. They are taking it.”
Buyers always determine the price. If there are enough of them that want to pay more they will drive prices up. Sellers have no control if no buyer is willing or able to pay the asking price.
The telephone company is building a condo tower and they’ve sold out their pre-sales units.
“It’s all geographic who’s doing well.”
Recent figures from the Real Estate Board of Greater Vancouver compiled by various real-estate analysts indicate higher numbers for unsold inventory than past years at the same time.
Local sellers all say that it’s not foreign investors driving the market for the successful projects, but local investors and people planning to live in the condos themselves.
Ms. Goertz said Telus offered its employees priority in sales at Telus Gardens and 150 of them bought, even though the price discount was a modest one per cent.
BLISTINGAGENT had an interesting point in the previous thread: A couple of years ago when the market took a dive a lot of presales buyers tried to walk away from their contracts and developers sued them for the difference between their deposit and the current value of the condos. What happens if the market takes another dive and Telus employees try to walk away from their presales? Dock their pay?
Hey! A opening day presales condo in Vancouver SOLD OUT!
Marine Gateway, and the 415 pre-sale units that sold, is big news because at a time when listings are soaring and sales have been falling off a cliff, the pre-sales at this development have bucked the negative trend.
In fact it has completely turned that trend on it’s head.
Let’s put that into perspective.
A sell-out of pre-sale condo unit offerings hasn’t happened in Vancouver in over six years. As Global TV noted in this story, you have to go back to the Woodward’s presale in 2006 – before the collapse of the world financial markets – to match an opening day pre-sale sellout of a condo development.
Either the market is on the upswing again or Rennie is back with his marketing magic… Although he does seem to have lost the ‘be bold or move to the suburbs’ thing.
Check out Whispers from the Edge of the Rainforest for an examination of this sell-out.