Yes, something is wrong when Canada's 3rd largest city, which consists of huge number of "lower cost" condos in Canada and has no major financial sector to speak of has almost double the national home price.VANCOUVER — Metro Vancouver's home prices rose the highest in Canada's property boom and will fall the farthest in its correction, real estate firm Royal LePage has forecast.
Royal LePage Real Estate Services, in its 2009 market survey forecast released today, predicts that Metro's average home price will decline nine per cent in 2009 to $540,100 from a 2008 forecast of $593,500.
That will be almost three times deeper than the national average decline for 2009 of three per cent, which should bring the average home price down to $295,000 nationally.
This isn't over, by-the-way - Vancouver is 153% of the price of Toronto's houses.
Yes, the largest and wealthiest city in Canada is being outdone by Vancouver. Seriously. Think about this for a second. Toronto has more millionaires than anywhere in Canada, has a massive financial services sector (meaning: wages to sustain large housing costs) and also has the ocean bordering its most prized areas like Vancouver.
Further reading:
Metro Vancouver has a 35% slide in Real Estate sales in '08.
Metro Vancouver Homeowners take huge equity hit.
Here are the Hives playing..you guessed it...
2 comments:
Generally, I believe the term "overvalued" is misleading. Something like "real" or true price is concept of Ricardo or Marx. If somebody offers something and somebody else accepts it - then the price is real. Of course, price is not constant in time - when there are more much buyers than sellers, prices are rocketing and no matter if we are poorer than Toronto or not...Now the prices are dropping, homeowners are not very happy, so are the realtors, but that's life, now is the time for homebuyers...
Take care!
Jay
overvalued:too high a value or price assigned to something
http://www.google.ca/search?hl=en&defl=en&q=define:overvaluation&ei=-NKcSeaMDYmMsAPV0sSjAg&sa=X&oi=glossary_definition&ct=title
i wouldn't get too caught up in the semantics, it's meaning is plain - the prices paid for vancouver real estate did not reflect the actual value of the real estate being purchased. This is based on several measures, including average price/ GPD per capita and other measures...sort of like nortel having a P/E ratio of 160 to 1 in the stock bubble.
Vancouver real estate, like dutch tulip mania and other bubbles is what it is: a bubble. The price for what is paid in Toronto for housing is relevant as a basis of comparison, as it is another major CDN city.
I would suggest trying to stay on subject next time. The issue was not about how to define "overvalued" but how ridiculous the housing prices in Vancouver are/were.
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