Vancouver’s detached home costs will fall 20 per cent over the next year as the number of homes changing hands in the city continues to plunge, National Bank said in a report on Friday.
“In the case of vehicles of Vancouver, we guess the prices correction will begin soon,” National Bank economist Marc Pinsonneault said in the report.
While a correction of that magnitude sounds dramatic, the bank characterizes it as “moderate” given how high prices have clambered up in the city.
In his report, Pinsonneault said Ottawa’s new mortgage regulations will have a chilling influence, but potential impacts “should not be over-estimated.”
Indeed, the Vancouver market was already coming off its torrid tempo of home sales before the new measures, and even the 15 -per-cent tax on foreign customers kicked in.
Pinsonneault quotes a number of other catalysts for Vancouver’s slide, including costs soaring out of reach for the some customers, new minimum down payment rules for homes over $500,000, and B.C.’s introduction of a three-per-cent tax on the value of homes sold for more than two million dollars.
“And eventually, China’s anti-corruption campaign is suspected of crimping the flow of capital from that country,” the report said.
Across all property kinds, National Bank forecasts a 10 per cent price correction for Vancouver, with fixed homes falling nine per cent and condos pulling back five per cent in the next 12 months.
In toronto real estate, the Toronto market, the report notes, is now “red hot.”
While Pinsonneault predicts home sales are about to slow in Toronto, the tight supply of houses for sale will restrict the slip in costs to only three per cent next year.
Among the catalysts for a Toronto sales slowdown: high prices pushing first-time homebuyers out of the market and rising mortgage rates as a consequence of following new mortgage regulation from Ottawa, he said.
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