Well here we are wrapping up 2013.
The Vancouver market continues to fluctuate in its flat range.
Owners are still paying more than renters, but can paint their walls whatever colour they want.
Renters are still more flexible when it comes to relocation and some of them have more diversified investments, but some of them just want to paint their walls whatever colour they want.
The Vancouver housing bubble is boring.
Not like some of the more exciting housing bubbles around the world. Remember the Celtic Tiger? Ireland had a giant boom, but now they’re tearing down brand new homes.
So what will 2014 hold in store for the Vancouver Real Estate Market? A slump, a dump, a bump or a jump?
What do you think, are we in for an exciting year or another yawner?
For all of you worried about a ‘housing bubble’ just stop and read this article:
No Housing Bubble Trouble.
At the national level, what could possibly kick national home prices downstairs? There is nothing to suggest massive job loss ahead or a huge oversupply of new homes. That leaves only the dubious assumption of a big increase in mortgage interest rates as the trigger for any nationwide decline in home prices. But national housing prices did not fall in the past when mortgage rates rose to twice their current level.
Oh, wait.. Sorry that’s from the Washington Times in 2005 and refers to the US market.
This is the one I meant to point to:
No Bubble, No Trouble.
A housing slowdown in Toronto and Vancouver could affect consumer confidence in regions with strong economic fundamentals like Calgary, Edmonton and Halifax, adds Don Campbell, best-selling author of Real Investing in Canada. But rather than a sharp decline, you’re more likely to see slower rates of price appreciation and home sales, says McKellar. “Overall the economy of Canada compared to other countries is still doing very well,” he says. “Housing markets are a function of the economy. Not the other way around.”
Hat-tip to Patriotz and Many Franks for the article links.
Dropping prices on condos are being blamed for pulling down home costs in Vancouver.
..because what could be worse than more affordable housing?
Prices on all housing types are falling with forecast for more price drops, Royal LePage is forecasting a 3% drop overall in 2013 but the largest drops so far are being seen in the condo market, which have fallen 3.6%.
“Buyers are waiting for that big decrease to happen but I think if they’re going to keep waiting for that, chances are they aren’t going to see it,” said Todd Talbot, realtor and host of W Network’s Love It or List It Vancouver.
That’s because industry experts say some sellers aren’t interested in making significant price reductions, and are taking their homes off the market.
“They don’t have to sell,” said Brendon Ogmundson, an economist with the BC Real Estate Association.
“You don’t find a lot of extra listings unless people need to sell quickly because of some financial catastrophe, and that simply isn’t in the cards, so what we’re going to see is normal demand and supply dynamics.”
Now I’m curious – what’s you best guess. Does the BCREA economist really believe that prices are set by people taking their property off the market, or by the properties that are sold?
It’s that time of the week again, time for our Friday Free-for-all! This is when we round up the weeks news and have our open topic discussion thread for the weekend, here are a few recent links to kick off the chat:
–IMF: You need tighter mortgage rules
–TD: forcasting for the provinces
–Teranet HPI scatter plot
–Conservative impact from RE market?
–Carney gets $400k for housing
–Luxury home decline
–Sales below 10 year average
–Stay out of New West Bob
–Home prices fall in most Canadian markets
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!
There’s less than half a month left in the year, so that’s a good time to revise forecasts. The CREA has revised their 2012 national sales forecast from an increase of 1.9% to a drop of 0.5%. I’m guessing they’ve also revised their forecast for 2008, 2009, 2010 and 2011.
Looking ahead they expect 2013 to see a sales drop of 2%, but here in BC they forecast both sales and prices to drop just by 0.3 percent.
“Annual sales in 2012 reflect a stronger profile before recent mortgage rule changes followed by weaker activity following their implementation,” said Gregory Klump, CREA’s chief economist.
“By contrast, forecast sales in 2013 reflect an improvement from levels this summer in the immediate wake of mortgage rule changes. Even so, sales in most provinces next year are expected to remain down from levels posted before the most recent changes to mortgage regulations.”
Finance Minister Jim Flaherty moved in July to tighten mortgage rules for the fourth time in as many years in order to discourage Canadians from taking on too much debt. Among the changes, Flaherty made mortgage payments more expensive by dropping the maximum amortization period to 25 years.
FFffffff! Is anybody else getting sick of the miopic talk of ‘tougher’ mortgage rules? Here’s a great point from Ben Rabidoux about how to put these mortgage rule ‘changes’ and Flahertys ‘tightening’ into historical perspective:
Before looking more at the implications of a mortgage rule change like the one being proposed, it may be helpful to provide a brief overview of the mortgage changes that have occured over the past few years:
- In 1999, the National Housing Act and the Canada Mortgage and Housing Corporation Act were modified allowing for the introduction of a 5% down payment….a far cry from the minimum 25% of a few years earlier.
- In 2003 CMHC decided to remove the price ceilings limitations. That is, it would insure any mortgage regardless of the cost of the home.
- In 2005 and 2006, CMHC began insuring 30, then 35 year amortization mortgages.
- In 2007, CMHC allowed people to purchase a home with no down payment and ammortize it over 40 years. This was changed back to a 5% down payment requirement and a maximum amortization length of 35 years in 2008 once the idiocy of this policy was blatantly obvious.
Here’s the point: CMHC has been in existence for almost 65 years. For the first 60 of those years, they never insured mortgages with amortizations greater than 25 years. Only in the past 5 years has this experiment been started. The 35 year ams that are now on the chopping block have been around only since 2006. So let’s understand that any move to shorten amortization lengths is NOT some new, revolutionary move, but rather a move back towards norms that are both long-standing and fiscally prudent.