Arm Chair Economist – No Precipitous Decline for Vancouver
Posted October 15th, 2012 in Real Estate, Real Estate Stuff | 
Green Chair Economist
TD Economist Francis Fong had this to say about Vancouver’s real estate market.
It’s All Green
“with interest rates remaining sufficiently accommodative, we do not anticipate any precipitous decline in housing activity in the near term.”
Cheap Seats
“Rather, we expect a gradual unwinding of the imbalance in both sales and prices over the next few years. Moreover, the bulk of the correction will be concentrated in markets we feel are particularly over valued, such as Toronto and Vancouver”
Adjusting Thought
Nothing much new about Fong’s view of things other than it is does serve as further confirmation that what was is no more. We might next expect commentary from chiropractor’s anxious to re-align our financial bones telling us how much of an ‘adjustment’ will be necessary.
Quotes Courtesy TD.com
“Over valued markets”?
Jeez. Who knew?
I wonder why she didn’t mention that at LEAST two years or so ago?
Driving and using only a rear-view mirror sounds “exciting/fun”. (Until it isn’t).
With respect, your headline is misleading. The quote you used regarding no “precipitous decline” refers to the Canadian market as a whole. As you note in the rest of your post, Francis Fong goes on to point out that the bulk of correction will be in Vancouver and Toronto. In other words, there may not be a precipitous decline in the Canadian market generally but that reasoning doesn’t apply to Toronto/Vancouver. In fact, one could argue that the extremely high gains in Toronto/Vancouver are the most susceptible to steeper drops. Other areas of Canada have not had the same increases and will not see drastic decreases. That is a more balanced read of the TD report and in line with the conventional wisdom.
@gill
with equal respect I ask when has conventional wisdom applied to Vancouver real estate?
@Larry
You are right Larry. Conventional Wisdom didn’t apply as the prices soared as compared to just about any reasonable housing metirc.
Let’s see, with respect to Vancouver, the prices are up 150% since 2000, so it’s only reasonable they revert to the mean! Today’s $1Million average price should really be around $650K to come back into line with the long term average price appreciation trend of 4-6% per year.
Maybe Conventional Wisdom is like a pendulum, prices will find stability but for now, BUYERS ARE STARTING TO TASTE REVENGE!