Vancouver home prices will fall up to 20 per cent: National Bank
Posted October 22, 2016 2:23 pm.
Last Updated October 22, 2016 2:25 pm.
This article is more than 5 years old.
VANCOUVER (NEWS 1130) – The National Bank of Canada is predicting a major correction to Vancouver’s hyper-inflated housing prices over the next 12 months.
In a special report released Friday, the bank says the cost of a detached home will decline 20 per cent, with more modest nine per cent and five per cent price drops for attached homes and condos respectively.
The report notes that home sales in Vancouver started to fall back in March, long before the province announced its 15 percent tax on foreign buyers. The resale market remained tight however, so prices remained level through August and September.
The bank expects sales to continue falling, in part because of new mortgage rules the federal government announced earlier this month.
Director of the UBC Centre for Urban Economics and Real Estate Tsur Somerville says while this prediction is plausible, there are many factors to consider in the current real estate market.
“Single family house prices can be relatively stable even in a down market if people who have the houses don’t feel any impetus to sell,” he explains.
Somerville adds that even a 20 per cent drop still wouldn’t make a single family home affordable in Vancouver.
“Ironically, even if house prices fell 30 per cent, they would still be higher than where they were in January of 2015,” he says.
Canada’s other super-heated housing market, Toronto, will also experience a price drop in 2017 according to the National Bank. But because supply is unusually tight, a more modest three per cent the drop is expected.
