{"id":3678,"date":"2016-10-17T11:11:41","date_gmt":"2016-10-17T18:11:41","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=3678"},"modified":"2016-10-13T09:58:08","modified_gmt":"2016-10-13T16:58:08","slug":"vancouvers-housing-market-is-set-for-a-slow-cooldown","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2016\/10\/vancouvers-housing-market-is-set-for-a-slow-cooldown\/","title":{"rendered":"Vancouver\u2019s Housing Market is Set for a Slow Cooldown"},"content":{"rendered":"<p style=\"text-align: justify;\">If you\u2019re worried about a Vancouver housing market crash, take heart \u2014 according to a new RBC report, a \u201cwholesale collapse\u201d is unlikely. Instead, the bank expects demand and prices to gradually \u201cland\u201d at more manageable levels in the near term.<\/p>\n<p style=\"text-align: justify;\">RBC\u2019s prediction is based partially on stats that show the Vancouver housing market has been cooling since February, when home resale activity reached a seasonally adjusted all-time peak. Overall, activity dropped 38% from then until August, with month-on-month declines increasing progressively over that period. Home prices have remained high, but in September the benchmark price for a Vancouver home fell for the first time in almost three years.<\/p>\n<p style=\"text-align: justify;\">The bank sees home sales declines and price moderation continuing steadily for two main reasons. First, it believes the Vancouver housing market\u2019s economic and demographic underpinnings \u201cremain solid\u201d \u2014 for example, interest rates are still low and job growth in the city has been high for the past year. Second, despite the new foreign-buyer tax, Vancouver is still in a good position to attract wealth and investment. Why? In RBC\u2019s opinion, the city\u2019s strong appeal for wealthy Chinese investors is unlikely to be shaken by the tax for long.<\/p>\n<p style=\"text-align: justify;\">All in all, RBC is calling for home resale activity to fall 7% this year and 30% in 2017, and expects the aggregate benchmark price for a Vancouver home to be flat next year after gaining 25% this year. That said, there are definitely factors that could tip the market into a more extreme fall, and the bank has identified the five it sees as most important. Here\u2019s a quick breakdown:<\/p>\n<p style=\"text-align: justify;\"><strong>1. Policy<\/strong><br \/>\nFor RBC, policy \u201cin its various forms and at various levels of government\u201d is the factor most likely to influence the Vancouver housing market. The bank believes that if the new foreign-buyer tax is unsuccessful in moderating prices in the city, the BC government will likely introduce other measures.<\/p>\n<p style=\"text-align: justify;\"><strong>2. The \u201cforeign\u201d element<\/strong><br \/>\nWhile RBC thinks foreign-buyer activity in the Vancouver housing market will recover after the big drop seen in August, it admits that the tax has \u201cintroduced a thick layer of uncertainty.\u201d<\/p>\n<p style=\"text-align: justify;\"><strong>3. Speculation<\/strong><br \/>\nMuch of the frenzied market activity seen from early 2015 to early 2016 was the result of \u201cbuyers motivated by expectations of capital gains,\u201d says RBC. That means if there\u2019s a noticeable slowdown in home price increases in Vancouver, speculators could become sellers rather than buyers.<\/p>\n<p style=\"text-align: justify;\"><strong>4. New supply<\/strong><br \/>\nVancouver has been short on housing since mid-2014, but builders have been rushing to correct that deficiency. Housing starts rose 8.6% in 2015 to reach a 23-year high of 20,900 units, and were up 46% in the first nine months of 2016. It is possible that supply may ultimately overshoot demographic requirements.<\/p>\n<p style=\"text-align: justify;\"><strong>5. Local economy\u2019s dependence on housing<\/strong><br \/>\nBC\u2019s economy is heavily dependent on the housing market, meaning that a sustained period of housing market weakness could negatively affect the economy. In a worst-case scenario, a correction could be caused by a \u201cnegative feedback loop\u201d between the housing market and economy.<\/p>\n<p style=\"text-align: justify;\">So what\u2019s the takeaway? RBC is firm in its prediction that an orderly housing market landing is in store for Vancouver, but recommends watching home listings carefully for signs of a crash. If listings surge for a sustained period of time, it could indicate that speculators are \u201ccashing in their chips.\u201d<\/p>\n<p style=\"text-align: justify;\">The bank also warns that even if the cooling it expects plays out, it\u2019s unlikely to completely fix Vancouver\u2019s housing affordability issues. While RBC sees condos and rental units becoming more attainable, it believes \u201cowning a single-detached home in Vancouver is unlikely to ever become affordable by Canadian standards.\u201d<\/p>\n<p><a href=\"http:\/\/news.buzzbuzzhome.com\/2016\/10\/vancouver-housing-market-factors-that-could-trigger-crash.html\" target=\"_blank\">Vancouver\u2019s Housing Market is Set for a Slow Cooldown, but These 5 Factors Could Trigger a Crash<\/a> by Charlotte McLeod | Buzz Buzz Home<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you\u2019re worried about a Vancouver housing market crash, take heart \u2014 according to a new RBC report, a \u201cwholesale collapse\u201d is unlikely. Instead, the bank expects demand and prices &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2016\/10\/vancouvers-housing-market-is-set-for-a-slow-cooldown\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-3678","post","type-post","status-publish","format-standard","hentry","category-real-estate"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Vancouver\u2019s Housing Market is Set for a Slow Cooldown &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2016\/10\/vancouvers-housing-market-is-set-for-a-slow-cooldown\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Vancouver\u2019s Housing Market is Set for a Slow Cooldown &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"If you\u2019re worried about a Vancouver housing market crash, take heart \u2014 according to a new RBC report, a \u201cwholesale collapse\u201d is unlikely. Instead, the bank expects demand and prices &hellip; [read more]\" \/>\n<meta name=\"twitter:creator\" content=\"@RoryClipsham\" \/>\n<meta name=\"twitter:site\" content=\"@RoryClipsham\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Rory Clipsham\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/10\\\/vancouvers-housing-market-is-set-for-a-slow-cooldown\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/10\\\/vancouvers-housing-market-is-set-for-a-slow-cooldown\\\/\"},\"author\":{\"name\":\"Rory Clipsham\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/#\\\/schema\\\/person\\\/0672b9777e67473b9bd9247df49499c7\"},\"headline\":\"Vancouver\u2019s Housing Market is Set for a Slow Cooldown\",\"datePublished\":\"2016-10-17T18:11:41+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/10\\\/vancouvers-housing-market-is-set-for-a-slow-cooldown\\\/\"},\"wordCount\":633,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/#\\\/schema\\\/person\\\/0672b9777e67473b9bd9247df49499c7\"},\"articleSection\":[\"Real Estate\"],\"inLanguage\":\"en-CA\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/10\\\/vancouvers-housing-market-is-set-for-a-slow-cooldown\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/10\\\/vancouvers-housing-market-is-set-for-a-slow-cooldown\\\/\",\"url\":\"https:\\\/\\\/www.roryc.ca\\\/blog\\\/2016\\\/10\\\/vancouvers-housing-market-is-set-for-a-slow-cooldown\\\/\",\"name\":\"Vancouver\u2019s Housing Market is Set for a Slow Cooldown &#8226; 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