The worlds biggest bond fund seems to think there’s some sort of an issue with the Canadian real estate market.
Ed Devlin sees a decline somewhere in the range of 10-20 percent for home prices across the nation.
“And if you get that kind of 10-, 20-per-cent real correction, that should alleviate some of the stresses,” he added in an interview with our real estate reporter.
“And so that’s kind of what what we’re seeing. It will start this year, it could be bumpy along the way.”
To be clear, Mr. Devlin is not forecasting a sudden crash, but he joins a chorus of voices, from Deutsche Bank to the Organization for Economic Co-operation and Development, in raising red flags.
Deutsche Bank, for example, believes the Canadian housing market is the most overvalued in the world.
Read the full article here.
It’s the end of another week and that means it’s time for another Friday Free-for-all. This is our regular end of the week news round up and open topic discussion thread for the weekend. The first one of 2013!
Lets get to the links:
–REBGV HPI: peak down this much
–Here’s the press release
–Hottest property values dip in 2012
–Real Estate boom meet Dot Com Crash
–Jesse wins the 2012 prediction contest
–Here’s the 2013 prediction contest
–Why housing prices aren’t coming back
–Whistler condos down 39% over 5 years
–Dec 2012 Condo battle map
–Vancouver Realtor Hunger Index
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!
*Just a reminder: Registration is open over at the Vancouver Peak Forum, but you must leave a human comment within 2 days of registering or your account will be automatically deleted. This policy helps us keep the board purged of spammer accounts. Thanks for your understanding!
The following was submitted by a local realtor, we have removed identifying information because we have a policy against using story submission as a promotional tool, but their post is the flipside opinion of what is normally covered here.
The realtor is welcome to identify themselves in the comment section below, but before they do they should understand that this site is visited by a few thousand people a day who believe that now is one of the worst times to buy real estate and there is no active policing of comments on this site. All comments are self moderated by the readership of this blog.
The Real Estate Board of Greater Vancouver released its new numbers suggesting that sales are down 28.6 per cent since November 2011 and down 12.7 compared to October 2012.
Some may view this as a negative thing, others, the bargain hunters view it as a positive. Its a buyers market where where a buyer could save thousands or perhaps hundreds of thousands on a property that just six months ago was selling at a substantially higher amount. Real estate operates on cycles, this is a rare time when prices are going down rather than up. Last down turn I personally know many people that bought at a low price and sold for a high price and made more money in just one transaction than they could in 3-5 years working their day job.
I strongly believe that this is the opportunity that many people have been waiting for. We can sit on the sideline and a few years from know talk about the opportunity that was missed, or buy now and profit from the downturn.
Many visitors here will likely have opinions on timing this particular market cycle so we won’t opine on that, but this comment from Best Place on Meth points out that at the current rate of decline the benchmark price of a REBGV home is falling at $300 per day. So if you’re paying less than $300/day or $9000 per month for your housing in Vancouver you’re doing ok.
Here’s a nice article that should reassure you.
The housing market in Canada is forecast to fall, but not crash like in the US.
In fact the first three paragraphs each repeat that this will NOT be like a US style crash.
Canadian housing prices will fall 10% over the next several years and homebuilding will slow sharply in 2013, but the country’s recent property boom is not expected to end in a U.S.-style collapse, according to a Reuters poll.
The survey of 20 forecasters published on Friday showed the majority believe the Canadian government has done enough to rein in runaway prices, preventing the type of crash that has devastated the U.S. market for years.
“This isn’t a sharp correction, this isn’t a U.S.-style correction, it’s just simply an unwinding of the excess valuation that was created by artificially low interest rates for a long period of time,” said Craig Alexander, chief economist at Toronto-Dominion Bank.
“I would emphasize that while a 10 % correction sounds scary, in actual fact, this would be a healthy outcome.”
Just a gentle feather slowly drifting to the safety of the ground.
Read the full article here.
With more and more noise in the news lately about falling sales and prices in the Vancouver real estate market developers are getting creative.
When even the real estate industry predicts prices to be lower in the future how do you sell new condos?
How about offering a $100k price drop guarantee?
Crabman points out that’s what the Kimpton in North Van is offering.
It’s not entirely clear how it works, but lets assume they don’t mean that they guarantee prices will drop $100k in the next two years.
“New guaranteed prices are what you will pay today and are net of the $100,000 price protection guarantee provided by the developer and registered on the title on closing”
Here’s the ad:
And here’s a shot of the sign currently on the building exterior:
This is certainly an interesting alternative to the many stealth price drops that we usually see: free car, etc.
What do you think? If you’re looking to buy but concerned about falling prices would the price drop guarantee make you more willing to purchase?