Photo: marc falardeau/Flickr
Vancouver home prices haven’t hit bottom yet, not according to the latest forecast from a credit union based in BC and Ontario.
“Home values will continue to ease lower,” writes Bryan Yu, deputy chief economist for Central 1 Credit Union, in a B.C. Economic Briefing.
But how much lower, exactly? Yu expects to see the benchmark price of a home in Vancouver drop another 5 per cent before the market stabilizes.
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Over the past three months, the benchmark price of a Metro Vancouver home, including both condos and houses, has fallen 3.1 per cent, according to the Real Estate Board of Greater Vancouver. That put it at $1,070,600 as of the end of September.
While sellers, particularly those in the higher-end detached market, may not welcome the prospect of a further depreciation in home values, buyers should get a leg up.
“Buyers will be able to negotiate better pricing terms in the market,” says Yu, adding to his prediction.
As sales activity has slowed — compared to September 2017, transactions were down 41 per cent last month — listings have been piling up.
This past month, 2,611 existing homes changed hands, making for the slowest September since 2012. Yu anticipates total sales this year will be down 25 per cent from 2017’s tally, with roughly the same level of activity expected in 2019.
There is no one cause hampering activity, Yu suggests.
Rather, he provides a list of several factors driving activity down: expanded stress testing for mortgage applicants, the already high cost of housing, and rising interest rates. “A plethora of provincial policy measures have shunted buyers to the sidelines and given pause to those still able to purchase as prices erode,” he notes.