Vancouver Ranked 3rd in Livable Cities Study
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08-22-2012, 10:14 PM
Lest We Forget
Join Date: Sep 2004
Location: Winnipeg, MB
Originally Posted by
It happened in Vancouver only 30 years ago. There was a huge spike in the late '70s to early '80s where housing prices doubled in a short span before losing half their value just as quickly. There were also a couple of 25% drops in the '90s, so to suggest that it can't happen again is foolhardy. Even in 2008 homes lost nearly 20% of their value before they were propped back up with emergency level interest rates which made money basically free to borrow.
I doubt we'll see a massive US style crash either, but a 25-35% drop is a very distinct possibility, which is several hundred thousand dollars of value for the average house in Vancouver.
The housing crash in the US had more to due with the banks giving people mortgages who couldn't afford them. Banks in Canada are equipped to do this and it won't crash nearly as much as the US market did. Markets tend to crash but the dollar wasn't strong then, banks weren't nearly as prepared. Banks control the prices by how much they give people to buy homes and how much people can afford.
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