Melting!

Real Estate sales in Vancouver and Victoria are down. 10-15% from last year depending on the type of house/condo.

This is, I suspect, very much the top of the ski hill. But the price decreases are not going to come for a while.

There is a natural tendency for people who own real estate to believe that their house/condo/block/neighbourhood/suburb/city is different and that they are entitled to a price which does not reflect the market.

And, of course, real estate agents who want the listing tend to value on the sunny side of optimistic. Why not? A real estate agent with a listing – no matter how incorrectly priced – has 90 days to sell the house and make a commission. In a falling market starting high and dropping the price and then presenting offers even lower than the asking does not hurt the agent. 1.5% on 900k is not substantially different than the same commission on 1.1 million.

What is forming now is a good deal of buyer resistance and caution in the light of the changes to the mortgage rules and the dawning suspicion that $550k for a 600 square foot concrete box may not be a world beating investment.

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One thought on “Melting!

  1. Maikeru says:

    In Vancouver, BC Assessment Authority Estimates coupled with BC Building Bylaws, have created uninhabitable front lawns on 33 ft. lots worth $319,672 (1,996,286 CNY), plus maintenance and taxes…

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