Are Housing Prices In West Vancouver Going To Fall?

Are Housing Prices In West Vancouver Going To Fall

Are housing prices in West Vancouver heading for a correction? The RBC forecast for 2022 and Desjardins report give mixed signals. However, there is good news for buyers: new arrivals may help curb prices. Reborn international immigration has helped Vancouver‘s market, which limits the correction’s effects. While interprovincial migration has also contributed to the price rise in BC, the rate has not impacted Vancouver’s real estate market as much as it has in other provinces. In fact, the national average home price rose from $530,000 at the end of 2019 to $790,000 at its peak in February 2022.

Desjardins report

While the Canadian real estate market is in a slow recovery, the Desjardins report on housing prices in the city of West Vancouver is a sobering reminder that home prices could fall as low as 20% in the coming years. The decline will likely be tempered by the recent rise in interest rates, and the Canadian government has promised that the rates will eventually fall below zero percent. The report also suggests that home prices will be down by 15% by 2023, albeit not as dramatically as they did during the pandemic.

The Desjardins report also notes that housing affordability in Canada fell in the first quarter of this year. That measure is a ratio of a household’s income to the minimum income needed to afford a home. The decline in Ontario is a significant step back, but there was a 0.2 percent drop in Quebec. Senior economist Michael Dolega of TD Bank says the decrease in housing prices in Quebec would be a welcome change.

The Bank of Canada has warned against further rate increases to tame inflation, and says that the Canadian economy is strong enough to handle rising rates. But it has also warned that a slowdown in first-time buyer activity could mean a turning point for the resale market. Desjardins doesn’t believe there will be a significant correction, but the future is up in the air. The rate hikes will determine the future of the housing market.

The Canadian housing market has seen a pronounced decline in the last two months. The non-seasonally adjusted national average for homes fell by more than 15% in February. The declines occurred after the Bank of Canada’s aggressive hikes of the benchmark rate, with two half per cent increases in the last two meetings. The last supersized hike in Canada occurred 22 years ago. In the meantime, the Desjardins team is expecting a gradual decline in home prices in Canada, although it may be more extreme in some markets.

Despite the decline in West Vancouver, some markets are poised for even more significant price drops. Those with COVID-era buying trends are likely to experience the largest price drops. This is true across the Maritimes, Prairie provinces, and Newfoundland and Labrador. Moreover, communities within a few hours of Toronto are likely to see the slowest sales activity as borrowing costs increase.

The credit quality of the DESJ bank is strong. The company’s Tier 1A capital ratio was at 17.1% in 2Q17, slightly higher than last year. The company’s Tier 1A ratio is also significantly below the peer median of 11.9%. Fitch views the capital position as a key mitigating factor for the risks associated with its geographic concentration in Quebec. Furthermore, the Desjardins bank has excellent access to the Canadian equity markets.

RBC forecast

The RBC forecast for housing prices in West Vancouver has dropped a notch from last month’s report. While the bank expects home prices to fall this year, the average decline won’t be large enough to trigger a major correction. In a base case scenario, prices will fall by 3.6% this year, but increase modestly over the next four years. Ultimately, the bank expects prices to rise 14.1% over the next five years, rolling back most of the gains from last year and early 2017.

Meanwhile, RBC economist Robert Hogue warns rising interest rates will hit home buyers hard. The Bank of Canada has already raised its interest-setting rate twice this year, but hasn’t boosted it past two percent. Hogue predicts the central bank will increase rates a further one percent by the end of this year and have it at two percent by the end of 2022. Rising interest rates will make mortgages more expensive, which could mean a big increase in monthly payments for the average home in West Vancouver.

Despite the RBC’s latest forecast, many Vancouver real estate experts disagree with this outlook. Paul Sullivan, president of Central 1 credit union, says the bank’s method is “constrained” and that the housing market in Vancouver is overpriced because of offshore investment. He believes that if prices drop in Vancouver without the offshore investment, prices would decline by only a few per cent. In the meantime, he believes that the current trend will continue until the prices in Vancouver drop.

The RBC’s forecast for housing prices in West Vancouver is tempered by the fact that Canada’s demand for homes is higher than supply. The demand for homes remains above the long-term trend, but the supply is well below that level. As a result, prices are likely to fall even further in the next year. This is a good thing for Vancouver homeowners looking to purchase a new home. And it’s good news for first-time homebuyers.

In the long run, the average price of a home in West Vancouver is expected to rise 9.5% year-over-year, according to the Canadian Real Estate Association. During October, home prices in the region reached a record high of 106,300 units. Despite the forecast, prices in West Vancouver will remain relatively stable, although RBC has lowered the forecast for 2016 by a couple of percentage points.

The RBC’s forecast for West Vancouver’s housing prices is based on a number of factors, including the number of homes for sale. The number of homes for sale in the area is expected to increase by 8.3% this year. Compared to last year, this is higher than the average over the past five years. Furthermore, the supply of housing is still relatively low in the west side of the city.

Forecast for 2022

The BCREA’s second quarter housing price forecast for 2022 predicts that West Vancouver house prices will be lowered by more than 22 percent. The association expects rising mortgage rates to contribute to a stalling of the market. Home sales in 2022 will drop more than 22 percent, a figure that is consistent with the previous two quarters. It should be noted that this number will still be far above the historical average.

The province’s housing market remains markedly undersupplied, with only a fraction of homes on the market. This creates strong competition for homes and increases their prices. The ratio for detached homes, townhomes, and apartments for February 2022 is 50.8 per cent. If the ratio dips below 12 per cent, the market will likely see a decline in prices. If the ratio rises above twenty per cent, home prices will rise.

The BC government has made it clear that it will do little to support the real estate market in the province. However, it will respond by raising speculation taxes. This will help build new housing, but also keep prices from falling significantly. For this reason, Vancouver home buyers should consider applying for a mortgage while prices are still low. While prices may not fall as much as they did last year, a lower mortgage rate will not hurt them.

While the price of single-family homes in West Vancouver increased over the past year, sales were down 28 percent compared to May 2021. The median price of a detached home in the city was $3.3 million in May, up three percent from April and six percent higher than the same month last year. The benchmark price of a single-family home in West Vancouver was $3,475,600 in May 2022. The number of listings to sales in May 2022 was 16 percent lower than in May 2022, indicating a cooling in the real estate market.

After Trump’s exit from the White House, China will take over the world’s economy. As long as the country is not plagued by Covid 19 disease, it should continue to import goods to support the Vancouver real estate market. The return of tourists will also help the economy. The Canadian real estate market is expected to remain stable in the coming years, even with rising interest rates. The average price of a home in Vancouver will increase by 0.8 percent a year in 2022, which is well below the peak reached in February 2022.

BCREA’s latest report on the Vancouver housing market shows that prices will continue to rise through 2022. While the housing market will continue to experience a resurgence in the post-pandemic euphoria, the city will also benefit from immigration and foreign students, which will fill condo vacancies in the city. Foreign investors and resumption of international trade will also help the local economy. Although some realtors predict that prices will rise only slightly by 2022, the growth is likely to remain modest.

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