Vancouver Sun Headline: “Vancouver real estate prices face double-digit drop in 2017: LePage”

“The forecast for a double-digit price drop in Vancouver’s housing market makes for a nice or nasty surprise for 2017, depending on where you are on the property ladder, but experts say it still won’t make the city affordable.
Royal LePage CEO Phil Soper said prices are headed for double-digit decline in 2017 as buyers drop out of the market.
“Home prices had got so out of whack with the growth in underlying wages and salaries that there had to be a correction,” said Soper. “And it’ll happen in 2017.”

– ‘above the fold’ front page headline in The Vancouver Sun, 22 Dec 2016

A realtor citing fundamentals. Times are indeed changing. – vreaa

38 responses to “Vancouver Sun Headline: “Vancouver real estate prices face double-digit drop in 2017: LePage”

  1. It will look like Gold after August. Imagine if they take their home equity and put it into a call option for out of the money at GDX $22 or something where the chance of that expiring worthless is akin to waiting for the housing market to make a new high by then.

  2. From a psychological standpoint, this is significant.

  3. The only source worth listening to in this article is Davidoff – if only because he has such a lovely sonorous voice. Even when he’s wrong, like when he sold his house in North Van a few years ago and missed out on a massive uplift, he sounds good. He’d make a good thespian; or could do voice overs. He is not a pimp or lap dog of the industry like the others cited in the article.

    The entire business excrescence of brokers and agents is beyond ripe for disruption. They are rot. They would disappear without a ripple with a simple open bid structure. Instead of skimming the cream off transactions, these middlemen would be squeezed out like the black head pimples that they are. That would lower prices.

    All this quacking about price drops is like a furniture store advertising big discounts. Every piece of particleboard rubbish is discounted from a ludicrous original price. The good stuff always costs.

    • No one is arguing that a good-quality property should not command a higher price than a low-quality one. You’ve missed the point entirely.

      • I don’t think that was his point. His point is that if you take what he describes as “good” properties, their drop is far less significant than say a garbage house ala what you saw on the earlier posts. So this drop doesn’t really help you if you want the premium stuff, while they might have dropped say 5% or so, and while you may face say 3 offers versus 7, you are still constantly bidding for those. The good properties by his definition rarely goes on sale and when they do, they will still command premium prices similar to what they got before the drop. Though I maintain that Arnie has a very narrow view as to what a “good” property is and I think most of vancouver’s detached supply would not make his list.

      • Anyone else see through this B.S.?

      • Hmm.. actually since we have a lot of so called housing experts on this forum, let’s see how expert they are. Can anyone find a lot that Arnie would consider good (so.. here is the criteria, not noisy, beside a hydro powerline, has an underground stream, t intersection, no underground rail way, at least standard lot size, house not falling apart, not a grow op, not on a bog land, not underground oil storage tank,not on a steep slope …) in Vancouver or Burnaby that has gone down 20% from the peak. If your answer is no.. then I can’t see why what he says is BS. Because guess what, if that is indeed the case, then this so called drop has done nothing for the average buyer.

      • brian, your exercise is too narrowly defined, and so kind of pointless. aside from the land/property itself, you have forgotten 2 (at least) other important factors – the owner and time. owners have many reasons to sell, and those reasons will have a strong influence on the price. also, time – we are barely several months into the “correction” and you expect to see 20% reductions in all properties? come on, it took years to get us here, how about we at least get through the spring before coming to too many conclusions (not to mention December listings/sales may not be the best month to hang your hat on).

      • @K, I absolutely agree with the timing being bad and that we are too short into it. I am also doing this to point out how pointless it is to assume this correction is anything more than just that.

        As for the exercise being pointless or narrow, I would caution against that view. If you took that list to most experienced real estate people in vancouver they would tell you that is what you are supposed to be looking for. Any of those flaws would greatly reduce the value of a property and also of course its enjoyment. That list is at a minimum what a good property should look like, anything that fails it really should be considered poor property.

  4. rod_jonsson_pmd

    some interesting commentary out there. current macro setup is like 1972 – not 1980. china part is different though. happy holidays … please excuse … it’s that time again …

    • 2016 house price growth in prime central London by area

    • While on the other side of the Pacific, a city fairly similar to the province attracting tax-dodgers and kleptocrats like flies on dung, …. if we are not already there, some catching up to do.

      a condo in this building has dropped close to 50%.
      “Analysts said some properties were sold at significant losses this year, including a unit at Sentosa Cove condo Turquoise that went for $3.8 million. The seller had bought it at $7.16 million in 2007.”

      • “Another apartment on the eighth floor at Seascape – also in Sentosa Cove – was resold at $6.35 million in October, down from its $11 million purchase price in 2011.”

    • I’m almost done here, and appreciate the civility and kind tolerance of this blog. Thanks VREAA and team.

  5. While I agree this is actually quite significant as people look at it and see double digit drop and psychologies are likely to change, I will believe it when I see it particularly when the same guy had consistently called earlier for increases in 17. Again, I hate to repeat Arnie’s sentiment but that is the case with a lot of house hunters out there currently, if you want to bid on a crappy house with issues (and given vancouver’s characteristics there are a lot of those), then you are still paying premium on good properties even as this psychology shifts. You still can’t get away from bidding wars for good properties even as we speak today.

    • This is what denial looks like, folks. It’s the first stage of grief. Then comes anger. Then acceptance.

      • Ah right…. let’s see about this so called denial in a year or so.. btw.. care to comment on this article? S

        Are we really that expensive?

      • I will comment – first, yes, real estate in Vancouver is very expensive. Compared to a few cities around the world perhaps not. Compared to MANY MORE cities around the world, yes.

        but brian, let me ask you to comment on this line from the story;
        “I also feel safer putting my treasure outside China,” he adds.
        I’ve often wondered why Chinese folks feel the need to take their money out of China. Is it really such a crooked place?

      • Well… there are a couple of important factors. 1. Chinese laws are extremely harsh, they often jail or execute people for large amounts of bribery. Pretty much if the government wants to nail you for bribery you are done. 2. If you succeed as a business in China, there is very little chance you have done it without bribery. So…. you can put two plus two together and tell me if you are a successful businessman, would you not be afraid of a dictatorship that can jail you and take all your assets at their whim by accusing of something that you would have certainly done to reach your level. Is it such a crooked place? I don’t think China is that bad… but given the above, would you trust your assets there?

        As for whether Vancouver is cheap or expensive, I don’t want to type in a long list again. But basically I would leave it as this, the fact that we are the largest asian city by percentage of asian people in the western world is no coincidence. Demographics indicate that will continue and even expand. There is nowhere else outside of asia where you can find this type of demographics. That certainly plays a large factor in immigration considerations. So… if china is where they are coming from, then whether you are cheap or expensive will be compared to chinese cities.

      • are you talking about yourself? keep singing the same song for years! hope the new year will bring better luck to your bears.

  6. Why would anybody buy a place now if it’s going to be cheaper next year? I’ll wait for the sale thanks

  7. Realtor incomes my drop a lot. I’m less convinced that prices will do the same by the end of next year’s. Maybe a few SFHs, which are really the ones we’re all interested in, so at least get pre-approved for the fall…

    • Am curious. On what basis will you judge if the market has bottomed?

      • 2 things: resale inventory drops after being high, and construction activity is depressed for a few years. It will be a while before we get to that point.

      • “Years”. I agree. Hence my confusion. You suggested getting pre-approval for the fall. Seems waaaay too early.

      • If you follow my Twitter account you know I say little that isn’t ironic.

    • I agree with that “pre-approved” and “pre-qualified” tools, which are at no cost to applicants. Although I don’t really know much of the mechanism such as if one can drag 12-24-36 months before buying.

  8. There is an Arab saying – that when buying a camel, look not to the beast, but to the seller. This is a useful axiom; whether buying a used car, or a property.

    People don’t sell willy nilly. What is their motivation? The easiest thing to ascertain is how long they have owned. Is it a flip? Is it a lipstick, or a gut reno? A genuinely motivated seller who has held their property for many years and is selling for genuine reasons is uber rare – the holy grail of real estate rodents. That’s why ads crow about a property that is on sale for the first time. The lol (little old lady) without heirs is the golden fleece. She will be fleeced, but she won’t cause trouble from her care home.

    A good rule to keep in mind is that everything the toads in the real estate industry do is for the benefit of themselves. It’s useful to assume that what they say and do is usually the opposite of what is good for you. If you are told you’ll have good neighbours – they will be nasty. If they say it’s a good location – it will be crap. If they say there are more bids coming, they’re jacking with your head.

    There is an interesting graph on agent statistics in Toronto showing that over 6,000 of these rodents sold Zero properties in a year; over 5,000 sold just one; almost 4,000 sold only two. So these rodents are scurrying around, clogging the roads in their leased luxoboats – bothering people. Is there an industry as ludicrous as this? Besides the US military?

    Assuming real estate rodents should exist at all, a basic change to commission structure would be useful. It should be changed from a front load, to a back load. As it stands, as soon as a listing contract is signed, the agent rat teeth draw blood. There is no real incentive to work to maximize profit to the seller. The tens of thousands of extra dollars to the seller at the top end mean squat in extra commission to the rodent.

    If the transaction were back loaded, i.e. if the rodent gets the price they pulled out of their asses to get the listing, they get the big payout. If they exceed the list they get even more percentage. If they don’t get what they said they could get, then it’s obvious these “experts” were lying to get the listing and will start quacking about “the market”.

  9. ‘Twas the night before Christmas…

  10. Question is, if it is legitimate, then why hasn’t VSB coppied-cat the money trails?

    Cui Wen (Cindy) Yao and her husband, Ouyang Zhi, incorporated Can-Share Connection in 2004 February, using their home address at Montreal west island. Can-Share Connection has no other employees. Its clientele includes:
    ~ EMSB
    ~ New Frontiers School Board
    ~ Sir Wilfrid Laurier School Board, covering Laval, Lanaudière and Laurentians school districts.
    ~ Riverside School Board, for the Montérégie school district.
    ~ Eastern Townships School Board
    ~ Western Quebec School Board

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