Vancouver's Housing Market Could Face Bumpy Landing-BMO
- Re-sales down more than 13 per cent year-over-year in April - Surge in supply driving down condo prices - Vancouver housing prices expected to continue to decline over the next two years
(firmenpresse) - VANCOUVER, BRITISH COLUBMIA -- (Marketwire) -- 05/11/12 -- Vancouver, one of the world's most expensive real estate markets, appears - so far - to be tracking the soft-landing path seen by Calgary and Edmonton in 2008, according to a new report from BMO Economics. However, poor affordability could create a little turbulence.
"The sizzle is coming off the Vancouver housing market," said Sal Guatieri, Senior Economist, BMO Capital Markets. "Resales were down 13.2 per cent year-over-year in April to below normal levels, led by detached properties in the pricey west side. Sales are down about 20 per cent in the first four months of the year from the same period last year."
Mr. Guatieri also noted that rich valuations, with the typical detached home running above $1 million, and tighter lending standards have curbed demand. Moreover, foreign wealth, considered one of the drivers of high-end sales, could be moving to 'less' expensive cities, like Toronto.
The report notes that softer demand, coupled with a rising supply of condos, means sellers no longer have the upper hand, and price growth has moderated. "Buyers are starting to regain control over pricing," continued Mr. Guatieri.
According to the report:
Mr. Guatieri concluded that, because of poor affordability, prices should decline in coming years. While condos remain affordable, the typical house is not, and will become even costlier when interest rates rise, "A price decline would depend on the direction of interest rates and the desire of immigrants and foreign investors to buy into one of the costliest markets in the world. Vancouver's resales account for just 6 per cent of Canadian activity, so a correction should not affect the national economy."
Carolyn Heaney, Mortgage Expert, BMO Bank of Montreal noted that, for many home buyers during the busy spring season, it is important to seek options that will help them make a responsible choice when it comes to how they finance their purchase, "BMO continues to encourage Canadians to choose a mortgage that will allow them to save on interest costs and build equity in their home sooner; one way to do this is by choosing a maximum amortization period of 25 years."
The full report can be seen in this week's Focus feature, at .
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly-diversified North American financial services organization. With total assets of $538 billion as at January 31, 2012, and more than 47,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.
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Datum: 11.05.2012 - 18:34 Uhr
Sprache: Deutsch
News-ID 145663
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VANCOUVER, BRITISH COLUBMIA
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Commercial & Investment Banking
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