According to one of the U.S.’s most renowned housing market analysts, Vancouver’s housing bubble is more extreme today than California’s was a few years ago.
Robert Shiller, co-creator of the Case-Shiller Index, which measures U.S. house prices, told BNN late last week that “Vancouver looks like part of California” when it comes to its housing market.
Both Toronto and Vancouver’s housing markets are now coming under severe downward pressure. Toronto home sales fell 12.5 per cent in August, compared to a year earlier, while Vancouver’s housing market saw a substantial 30.7 per cent drop in the same period, marking its worst month of sales since 1998.
The federal government has tightened mortgage rules four times in recent years, in an effort to cool off what many sees as overheated prices. The most recent changes lowered the maximum amortization period on a government-insured mortgage to 25 years, from 30, and reduced the amount homeowners can borrow against their home equity, from 85 per cent to 80 per cent.
I say that there is no bubble and just a slowdown. I don’t see the comparison to California. Our system does not let people buy a $500,000 house with no money down and no income verification like what happened in the US.
Do you see a major collapse in Vancouver happening?