“I would love to buy in Vancouver even at a 15% discount. I have waited for over 20 years for Vancouver to become affordable and I have given up.
A lot of my work is in Vancouver. Only a few people I work with are NOT looking to buy. They hate their commute, so want to move closer. They want children, so want to buy secure and adequate housing. They want to build a future, and so despair of handing their money to the landlord. Or they just want Vancouver real estate for whatever reason. All of them are keeping their powder dry for any chance to get in. Then there are immigrants, always more.
So riddle me this, how many people do you think are there who are waiting for their chance to buy in Vancouver. 20? 500? 200,000?
Don’t get me wrong. I could and would buy there at half off. I just do not expect that to happen. I can’t speak for Toronto.”
– PassingAlong, comment at the Globe and Mail, 10 May 2012 11:41am
This logic will prove to be incorrect.
Yes, there are people on the sidelines who would like to own, and a relatively small number will buy in patches all the way down.
But, when prices start falling in earnest, the vast majority will not snap up homes at 10%-off or 15%-off or 20%-off…
The market will be falling from extremely overextended levels, 2 to 3 times fundamental values, and, with falling prices, prospective buyers will lose their appetite to overextend to the max of their affordability levels.
Even some who think they are waiting to snap up 15% off ‘bargains’, will end up sitting on their hands.
The vast majority of market participants have a great deal of trouble buying assets that are falling in value.