“Uncharted Waters” reads the front page of the Vancouver Sun last weekend, with the comment that “insiders” say that there are signs that is a full blown market correction looming! (…followed by the teaser, “But really, who knows?)
This does not add much to what we already know.
With 20/20 hindsight, it points out that the government-mandated mortgage stress test, combined with several interest rate hikes and the implementation of the Foreign Buyers Tax and the Speculation Tax in BC all contributed to a slowdown in the Vancouver housing market.
Then the usual suspects trot out their opinions about an upcoming slowdown in the market for 2019 (“There is greater reason to think that the regulation-induced downturn in sales will be sustained and will lead to a drop in housing prices.”)
However, studies about the reliability of expert opinions suggest that flipping a coin is about as good as most expert predictions.
The price drops are quite modest at this time, but because the public in BC has been used to double digit price increases for the past number of years, any slowdown, much less correction seems like a calamity.
In my view, housing affordability in the Lower Mainland is long gone –never to return, as long as Vancouver remains a “world class” city (and who would want to relinquish that distinction in exchange for lower housing costs?)
It would be better to reduce taxes and spend government money to create better paying jobs to allow buyers to afford the higher prices, rather than to meddle with the market and risk a far greater disaster, namely destroying the value of most people’s major asset.