Comments on: Greater Vancouver Real Estate Prices Just Made The Second Biggest Monthly Drop Ever

By: zeejay

zeejay — Mon, 08 Aug 2022 18:58:32 +0000

An Abstract.
“Since the 1970s, the federal government essentially stopped intervening in the credit market, effectively allowing the private sector to make the decisions. That move, some argue, has only led to a housing bubble. People are buying not because they need it, they are buying because of greed. Unfortunately, people are buying second, third, and fourth properties because equity on the first property, second, the third property is easier, and renting them out is more profitable than paying a mortgage which is cheaper than renting. Cheap money is responsible, at least in part, for driving home prices sky high. From 2009 onward, the Bank of Canada kept its crucial overnight interest rate below 2%—an historical low. With a policy rate of 0.25% until recently, interest rates on a five-year variable mortgage were as low as 1.25%. That was incentive enough for most Canadians to purchase properties and greatly increase costs.
The Bank of Canada kept interest rates low to stimulate the economy after a recession in 2009. In recent years, the central bank lowered interest rates to navigate the financial implications of the COVID-19 pandemic. Because its primary focus is to keep inflation low and stable, the Bank’s potential impact on real estate prices—as a result of its own monetary policy—is unpredictable. This means that, essentially, the central bank has no incentive to act if a housing bubble does form so long as the overall inflation rate remains at 2%.
The Canadian government has proposed an anti-flipping tax for one year, meaning anyone who sells a home they have owned for under 12 months could be subject to full taxation on their profits as business income. Some argue, however, that the one-year period is not long enough since stopping speculative behavior in the real estate market and encouraging longer-term investments would require a much longer period of anti-flipping taxation.”

By: george

george — Thu, 04 Aug 2022 21:54:15 +0000

In reply to Ian. If economics are the main drive for you, then you know what to do. There are more important things in life than $$ (once one realizes that) and whatever others are doing should not concern you. Just withdraw, think for a moment what is actually meaningful to you and then make a decision, not based on the market trends, friends and all the nonsense around you. This is the best time of your life (assuming you are healthy), don't waste it by waiting for outside circumstances to happen your way because the chances are slim. Good luck!

By: Ian

Ian — Thu, 04 Aug 2022 17:27:36 +0000

I don’t know, I’m at my breaking point living in Vancouver and I own a condo. Just so many people homeless people everywhere and it’s just getting depressing. Also living here for the privilege of being close to my job that lets me work from home? Why?

Could always just rent a hotel once a month and drive in for the same sort of situation and take a few hundred Ks in equity.

Just a rant in case anyone else feels me, it’s happening it’s just tough to say it out loud to other people who are also pretending to have the time of their life.

By: Kyle

Kyle — Thu, 04 Aug 2022 17:20:38 +0000

The condo market is still very weird. I guess since rents are rising so fast and people see the price drop as temporary they’re still considering it. Such a risky play right now though. I’m just going to a wait a few months and reassess.

By: Average Man

Average Man — Thu, 04 Aug 2022 13:31:26 +0000

Every time I read one of these stories I just start chanting “Let the bodies hit the floor.”