Vancouver Housing Market Freezes Up, Sales Crash, Prices Sag, For-Sale Signs Proliferate

“Entire Swaths of our neighborhood covered with For-Sale signs”

The numbers about the inglorious end of the totally insane house price bubble in Vancouver are bad enough. But the photos of “For Sale” signs along entire city blocks speak louder than the numbers ever could – in fact, they make us doubt the numbers.

The Real Estate Board of Greater Vancouver (REBGV) today reported that in November, residential home sales in Greater Vancouver plunged 37.2% year-over-year to just 2,214 homes. By category of home:

  • Sales of detached homes down 52.2%.
  • Sales of attached homes down 40.9%.
  • Sales of condos down 22.7%.

In essence, the market has frozen up, especially for detached homes.

The total number of properties listed for sale on the Multiple Listing Service (MLS) in Greater Vancouver rose 3.6% year-over-year to 8,385. Which leaves us wondering, given the for-sale signs along entire blocks – we’ll get to the photos in a moment.

REBGV president Dan Morrison tried to portray this situation in the best possible light: “While 2016 has been anything but a normal year for the Metro Vancouver housing market, supply and demand totals have returned to more historically normal levels over the last few months.”

The reason home sales plummet is this:

One, potential buyers get the memo instantly that the market has turned. From one moment to next, they lose their blind enthusiasm. They figure the longer they wait, the lower the price will be. Some of them will buy if prices drop enough. But prices haven’t dropped enough, so they don’t buy.

Two, sellers refuse to look at the memo. They cling to their hopes. They have a fantasy number in mind. The number that will make them rich. They put the home on the market and wait. And wait. And wait. Then they pull it off the market, and re-list it. If they’re not forced to sell, they’ll hang on by their fingernails to their hope, waiting for prices to rise, even as they’re falling month after month.

It’s not until sellers start reading the memo and start slashing their prices that deals are being made, and that volumes tick up. But Vancouver isn’t there yet. Far from it.

The MLS Home Price Index, which tracks the composite benchmark price for all residential properties in Greater Vancouver, fell 1.2% from October, and 2.7% over the past three months, to C$908,300.

Over the past three months, price declines were unequally spread among the areas. For example:

  • In Vancouver East: -2.7% to C$965,100
  • In Vancouver West: -2.0% to C$1,227.500
  • In tony West Vancouver: -9.5% to C$2,510,300, driven by single family detached homes, whose prices dropped -10.2% in three months

The composite price index for Greater Vancouver, though down 2.7% over the past three months, is still 20.5% higher than it was a year ago.

But the year-over-year price inflation is coming down. In June, before the 15% transfer tax (aimed at non-resident foreign investors) was implemented, the benchmark price skyrocketed 32.1% from a year earlier to $C917,800; in July, it skyrocketed 32.6% to $930,400. That was about the peak. Since then, the benchmark price has dropped to C$908,300, and the year-over-year price increase is down to 20.5%.

So Angela Johnson, a WOLF STREET contributor and our boots on the ground in Vancouver, reported that “entire swaths of our neighborhood are covered with for-sale signs.”

And she went out and took a series of disturbing photos of for-sale signs lined up and down entire blocks in her neighborhood. The type of photo we saw during the US housing crash in some of the hardest hit areas.

This photo was taken on December 1, on the 700 block on Renfrew St. in East Vancouver (we’ll get to the other side of that street in a moment, so hang on):


The photo below is looking east on the 2700 block of Broadway, near the intersection with Renfrew. Broadway is a main artery perpendicular to Renfrew. I circled some of the signs barely visible on the right side of the street. None of the signs sport “Sold” (photo taken December 1):


The photo below shows more homes for sale on Broadway on the other side of the intersection with Renfrew (taken on December 1):


Also on Broadway, facing west. Note that there are six for-sale signs behind the first one:


Now to the other side of the 700 block of Renfrew. Angela took the photo below on October 19, but the signs began appearing earlier – that’s how long these homes have been languishing on the market. It’s a little hard to see, but the for-sale signs line the entire block all the way back. And there’s a duplex under construction at the end (click to enlarge):


But these homes ended up becoming part of a large “land assembly” deal. A developer bought them, hoping to get the city to rezone the area to allow the construction of a multi-story mixed-use building. The rezoning is expected to take two to three years, if it happens at all. Once rezoned, the homes will be torn down. That includes the unfinished duplex at the very end of the photo below. The builder will likely rent out the homes until then. And so these homes sold for C$17.5 million combined, at the peak of the market, to be torn down:


Now even the OECD frets about Canada’s House Price Bubble and its consequences. Read…  What Happens “If the Boom Ends with a Bang?”

Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:

Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.

  90 comments for “Vancouver Housing Market Freezes Up, Sales Crash, Prices Sag, For-Sale Signs Proliferate

  1. Michael Francis says:

    The other downside when these developers go bust are the many contractors and sub contractors, often family run businesses, that don’t get paid.

    • Mick says:

      I too live in Vancouver, and you nailed it. I know a lot of people in the industry, from realtors to builders, since EVERYONE is in the industry now due to it representing 25% of Vancouver’s GDP.

      Let me tell you, it’s panic time. Contractors going out of business, realtors freakikg out, owners selling in fear.

      This thing went from delusion to panic in a few straight months.

      • Bob says:

        The attack is coming on both fronts. The local buyers will drop off as the local economy deteriorates and the job picture worsens. The Chinese buyer is being pressured by RMB devaluation and a Chinese economy ready to blow. Obviously, market momentum has turned. This time period between the turn and the price drops will not last long. The first sellers will lock in gains. In theory, all it takes is 1% of properties to move at a lower price to bring the whole market down. Remember, market prices are determined at the margin, and it only takes a small number of sales to demolish everybody’s gains. The lucky ones will be those who recognize the turn and accept a discounted price to get the sale done.

        • Tom Kauser says:

          Convince half the Canadians that supply will never be better and rates won’t go lower.
          Convince the other half that mortgage back securities are AAA and very rare due to everyone buying real estate with all cash
          Spotlight cash buyers during family friendly programing on CBC and establish flipping as the best and only way to become independently weathy.

      • Ed says:

        I lived that experience in Arizona a few years ago.

    • Keith says:

      That is why, as a contractor, I don’t work for contractors

    • michael says:

      have been renovating houses in the Kits/Point Grey area for the last 25 + years. downturns are just part of one’s business plan.

      • Mick says:

        This will be no standard downturn. You sound like the oil industry people in Calgary in 2014.

        They’ve changed their tune, and so will you. There has never been a credit bubble like this in history.

        THAT is what your assumption does not factor in.

      • Mr Monty says:

        So since you started your business you saw a flat to slightly declining market from about the early to late 90’s and then boom times from 1999 until 2016. The minor glitch around 2009 don’t even count. I agree with the other commentators – this downturn will likely be like nothing your business plan has ever seen. If you’ve put away a couple of million over the past 25 years you’ll be just fine, but it could be ugly for those who are up to their eyeballs in debt.

        • hidflect says:

          Very good point Mr. Monty. Similarly, maJor swathes of Australia have never seen a recession for 20+ years and there are people here up to their eyeballs in debt with no conception of what a recession is. It’s going to be rough for some.

        • michael says:

          started business in the 70’s, only been working the Kits. point grey market for the last 25 years. worked through 24% interim rates in the early 80,s on the sunshine coast. So i know what can happen when things go sideways. Everything is paid for, no debt, 3 months worth of food in the house. Enough cash to hopefully pick up a bug out property in Courtney or Powell River if property starts to tank up there.

          Nothing else I can think of that will prepare me and mine for the big one when it comes.

  2. polecat says:

    HA HA Ha Ha Ha Ha Ha Ha …….. I LOVE IT !

    This is like ice water to a witch ……. !

  3. Anonymouse says:

    Curious is the number of units for sale significantly higher? You talk specifically about units sold and prices drops only. Is the for sales localized to this specific area of town?

    How does Angela feel about it? Unfortunate that so many localizes are priced out of the market.

    • HBGuy says:

      I was in Hongcouver and Whistler for most of October 2016 and had an opportunity to observe and study the real estate market in detail. Sales are not localized to one particular area, i.e., there are a large number of listings in East Van, West Van, Surrey, Richmond, etc. So, all over the metro area.

      What isn’t well known is that a large number of properties aren’t occupied. The BC government and City of Hongcouver are considering a tax on unoccupied homes in order to alleviate the low vacancy rate, which is ~ 1.0%. It is estimated, based on data from BC Hydro, that as many as 20,000 homes in greater Hongcouver aren’t occupied, i.e., many were purchased as a bank account for flight capital from China, to be flipped to other Chinese buyers when convenient or used as a safe haven once the buyer left China. I mention these because in addition to the 8,000+ properties cited in this article as listed for sale, there is a further, much larger, shadow inventory that has the potential to be placed on the market in the form of condos purchased by expat Chinese buyers.

      Canadian immigration laws are relatively lenient compared to IOUSA’s and Australia’s when it comes to the amount of capital required to obtain an “investor visa”, i.e., a green card. Canada requires $500k CAD, compared with $1MM USD for the same residency privilege. So, if you have to leave China unexpectedly, or anticipate an imminent devaluation of the RMB relative to the USD and need to move capital out of China quickly, why not buy a Canadian residency? Park the money in a condo in Richmond and ride out the storm.

  4. Greatful again says:

    Anyone have access to the MLS there? It would be interesting to see how many homes are on the market now compare to a few months ago.

    • Wolf Richter says:

      Housing numbers are very seasonal, so I hesitate to compare November to June, for example. June is part of peak season and should be high. So with this caveat: in June, in Metro Vancouver, there were 7,812 homes listed for sale on the MLS. At the time, that was considered low for a June.

      • Greatful again says:

        My point being that a significant jump in inventory , even for an off season, would be a telling event. Again, the numbers may be worth looking at. Or , if you like, compare this November to November 2015. Example, San Diego county went from about 6000 in May of 2007 to about 12000 in July……

        • Mick says:

          The media in Vancouver is now sounding the alarm over the “rental crisis,” which is a 1% vacancy rate and high rents.

          Well, there’s over 22,000 empty properties in Vancouver, so I expect another shock event to “fix the rental crisis” soon.

          That should shore up supply in a hurry, as 20,000+ units are put up for sale or rent.

          As an incidental, SO MANY Vancouverites greatly depend on their rental income to cover their mortgages.
          A vacancy rate of 5% or more would drive down rents and leave some landlords without rental income.

          That alone would be a game changer with so many on the brink as it is.

    • Lars says:

      Go to: [] and that will give you access to all of Canada !!!
      Use the map and mouse to zoom in on a smaller location and view only the few homes for sale there, and by dragging the map view what’s nearby.
      It’s a great site ! better than we have in the US.

      • Unitron says:

        I don’t see an option to do a search for “price reduced.” if it’s there, it will probably be removed soon. Realtors don’t like buyers to know when prices start to fall, it tends to crimp sales. It’s alright for buyers to lose tens of thousands of dollars in depreciation when you earn your six percent from a higher price (assuming that’s the rule in Canada too).

      • A.S. GORDON says:

        We have Zillow in the USA.. its great..check it out.

    • Mick says:

  5. HBGuy says:

    Greater Hongcouver’s population is less than 3 million, or ~ half Metro Toronto’s. It’s also much smaller than Seattle’s (4.5 million), not to mention the Bay Area (7.5 million) and LA/OC (20+ million). These areas are relevant because they have also been large recipients of flight capital from China, but given their size, will be less impacted by new Chinese capital controls. They also haven’t had anything close to the run up in property prices seen in Hongcouver, although Toronto is close and will face its own price collapse soon enough.

    Hongcouver also has historically had large boom/bust real estate cycles since the late 1960s, and now appears to be entering another one. The last one was after Expo 86 when prices dropped by ~ 30%. The fact that “smart Chinese money” is moving to Calgary, where prices fell sharply because of the oil bust, is another clue.

  6. DH says:

    Wow, those pictures almost look fake because it’s all so ridiculous. Choppy waters ahead.

  7. memento mori says:

    For sale signs are common in Vancouver and it has been that way since the market started to run up in 2003.
    RE in Vancouver will be an interesting case study, but I say, wake me up when the prices crash 50%, even then it will be barely affordable to the normal people given the incomes in the city.
    Vancouver is the RE casino for chinese hot money. It will end when China crashes, if ever. Ignore all other noise signals.

    • HBGuy says:

      It depends on how you measure the crash. Prices in CAD terms are little changed in the past 2-3 years, but they’ve fallen by over 30% since the CAD was above parity with the USD in 2011-2013.

      The RMB tracks the USD closely, albeit, it’s fallen from 6.6 earlier in 2016 to 6.9 recently. That aside, if you’re a buyer in China looking at prices in USD terms, not CAD, there has already been a sharp drop in Hongcouver prices.

      While I was in BC in October, some research studies were released that postulated a 20% price drop (in CAD terms) was likely. Given the small size of the Hongcouver market relative to other North American markets, 20% seems like a best case scenario.

      Also, and importantly for financing (although most Chinese buyers pay cash), the Federal (Canadian) government introduced new restrictions on mortgage lending in mid-October that were designed to strengthen non-bank lenders. While they were prudent (from a taxpayer perspective) their effect will be to limit the amount of financing available to buyers and in turn, reduce the available pool of qualified buyers in Vancouver and Toronto.

      • memento mori says:

        All that matters is price in CAD. You can always find a currency that devalues or appreciates against the CAD to fit your theory that prices of RE in Vancouver have crashed. Next time the CAD devalues against the euro, you are going to say RE prices have crashed in Euro???

      • Michael says:

        we live in a world of leveraged economies so when your property has doubled in 4-5 years is a 20% drop something real. I can still make a sideways move even if I only get 2.8 mil instead of 3.4.

        • Mick says:


          You’ve already lost that.

          This will go down a whole lot more than 20%.

          And math 101.

          20% of 2.5m is much more than 20% of 1m.

          So if you made 100% on the way up, but lose 20% from there, you’re actually losing more like 40%.

          But, as I said, this has already dropped 20%, especially for high priced homes in expensive areas.

          And it’s only just begun.

    • Bob says:

      China is crashing. Look at the exchange rate. The RMB has lost a lot of value, so the Chinese purchaser has less firepower than before. A collapse in currency is the best definition of a “crash”. The drop has been only about 15% so far though.

      • HBGuy says:

        My abacus says ~ 8.0% devaluation of the RMB from 2013 (6.3 RMB = 1.00 USD) to 6.88 RMB = 1.00 USD today (data from KITCO). Round it off and call it 10%.

        During the same period, the CAD has gone from parity with the USD to a discount of $1.3295 CAD = $1.00 USD today (data from KITCO). So, netting out the CAD and RMB, a Chinese buyer would still be 20+% ahead relative to where the CAD was in 2013. Of course, had he/she bought back in 2013, it’s a different story, but they’d have beaten the price increases in 2014-2015.

        So, it all depends on what one’s entry point was, how they paid (cash or a mortgage), etc.

      • MC says:

        This of course assumes said loss of value is non-intentional and merely driven by dynamics over which the People’s Bank of China has no control.

        Personally I have started to believe these capital flights are merely a way for China to help devalue the yuan without having to come up with policies that can be counterproductive in an age when China-dominated trade pacts are replacing US-dominated ones.

  8. Mstrjack says:

    Good time to be in the signage business.

  9. Lee says:

    “Good government” in action.

    Just to look like they were doing something they screwed every home owner in the area: foreign and DOMESTIC.

    The market would have taken care of the problem without the 15% tax.

    I hope that the City of Vancouver gets very little tax, if any, from their stupid move.

    Any fiscal problems that arise from their tax is their own fault.

    • DH says:

      I’d love it if some of the cities here on the West Coast USA imposed the same 15% tax on foreign buyers. I’m not a fan of the Chinese using our neighborhoods as off shore bank accounts.

      • Eddie89 says:

        Yes! We should have a 15% transfer tax for foreign buyers in CA! If this should show up on a ballot, I would vote yes!

    • HBGuy says:

      Gregor Robertson, Hongcouver’s mayor, wants to impose an 1.0% tax (based on market value) on unoccupied properties. Imagine the army of people that can be employed to verify whether or not a property is occupied. A hypothetical scenario:

      City of Vancouver inspector: Mr. Lee, it appears from BC Hydro data that you’ve used very little electricity during the past 12 months, yet you claim that you’ve lived in this condo the entire time. What say you?

      Mr Lee: It is my principal residence in Canada, but I do travel back and forth to China frequently for business. As to the hydro usage, in China, we are accustomed to living without heat in the winter, and I don’t need air conditioning in Vancouver in the summer. So, my hydro usage is very low, and my son attend a boarding school in Toronto.

      I think you get my point. The 15% tax won’t raise much revenue, and the occupancy tax will raise much less, albeit, provide employment to many slackers seeking gubment jobs.

  10. Maximus Minimus says:

    It is part of a hazardous game called “Who wants to be millionaire”? Those who manage to sell in time, will walk away with a nice million dollar bonus. The game was hatched by the usual suspects: unscrupulous real estate agents, corrupt and inept politicians, and clueless central bankers.
    Did I mention main stream media, yet?

  11. Bob says:

    I’m surprised anybody is buying now. Who in their right mind would have bought in Vancouver last month? Who in their right mind would be building? Unfortunately I foresee lots of contractors losing their work over the next year. I also see lots of homeowners realizing they aren’t as rich as they thought earlier this year. I imagine this will drive down overall demand and depress the Vancouver economy.

    • HBGuy says:

      Hongcouver’s “official bird” is the construction crane. There are thousands of condos under construction (which is about all that’s being built) and the Bank of Canada is unlikely to move interest rates for at least 18 months (according the Stephen Poloz). So, the building will continue until it doesn’t.

      • KrisB says:

        It looks like building doesn’t continue anymore. I am getting monthly stats from CMHC (building starts), Stats Can (Building Permits) and Bank of Canada (credit creation).

        These are October 2016 numbers for Vancouver CMA as per latest Canada Mortgage and Housing Corporation housing market information:

        1. There are 36.043 housing units under construction including 21,573 condos.

        2. Housing starts SAAR (Seasonally Adjusted Annual Rate)
        September 2016 October 2016
        36,803 12,023

        3. Actual numbers

        The condo starts caved from 1,700 in October 2015 to 598 in October 2016.

        This is going to be a crash of epic proportions if the trend continues for the next several months. Tens of thousands of real estate related jobs will vanish, especially that FIRE (finance, real estate and insurance) constitutes 50% of the BC economy (with all the spin off’s included) rather then 25%. The people who hope to buy when prices drop by up to 80% will not buy anything because by then they will be all unemployed. Ironically their unemployment will be one of the main reasons for the collapse of prices. I saw this movie being played in 1980’s when unemployment hit 16% with another 8% collecting welfare. Only people with a lot of cash will be able to buy as credit will be scarce. It is not if but when delusional Vancouverites get crushed. The price of 50’x130′ lot in West Side (Dunbar, Kerrisdale, Point Grey) went up from $500K in 2003 to $4,5 million at the peak of the mania in February of this year and it is going back to where it started. If this is not insanity then I don’t know what is.


        • nhz says:

          Given general inflation of almost all currencies, I don’t think Vancouver prices will go back to what they were when the bubble started, more likely to the initial level plus inflation correction which is significantly more. Some types of properties might temporarily overshoot to the downside though. It’s difficult to determine a realistic “starting” value for prices in a housing bubble, usually that is shortly after the previous collapse which means prices could be artificially depressed for some time. Building cost is not a good measure either, because those costs tend to change strongly with the bubble fever.

          In 1981 we had a sudden RE crash in Netherlands that within 1.5 years wiped out the gains from the prior 100% runup. This was in an environment of high unemployment, high interest rates, a relatively small number of speculators and very conservative mortgage conditions compared to nowadays. For more expensive newly build homes, prices sometimes declined 60% within a few months because the bottom fell out of the market.

          Our current bubble has seen price increases of 1000-1500% over 25 years and it is still growing. Many owners have maximum mortgages, guaranteed by the taxpayer. If average prices correct by 50% the whole country is bankrupt, let alone if prices correct to their value at the start of the bubble (-90% or so).

          I have no problem buying when prices decline 80 or 90% because I would buy cash, but I don’t think it will happen; government will do everything they can to shift the damage to others than homeowners. Another issue is that with very strong price declines, whole neighborhoods can become uninhabitable – something that happened in some areas on the Spanish coast after 2008 (very low prices, but basically nobody would want to live there and the home in fact might have negative value) and I think I have seen similar scenes from some US locations after 2006.

        • chris Hauser says:

          what i like to see, real stats.

          when you get to big in the market, you become the market, if you know what i mean.


        • Mick says:

          You nailed it.

          Everyone either assumes it’ll only go down 20% if they’re in the industry, or that they’ll buy on the cheap, if they’re not.

          Both are wrong, especially in this case. As you say, all Vancouver has left for an economy is FIRE.

          Even public sector jobs are going to disappear as government revenues dry up.

          Look how the Liberais have been hacking and slashing for years already, even WITH the housing bubble propping up the economy,

          This will be the stuff of nightmares.

        • Dan Romig says:

          KrisB addressed a very good point about lot size. The photos posted with so many for sale signs give me the impression that these homes are on tiny narrow lots.

        • Angela Johnson says:

          @Dan Romig

          The standard lot size in East Van, including many of those in the photos, is around 33 X 110 ft.

    • Frederick says:

      Actually Im surprised anybody is buying ANYWHERE now but thats for another story

      • Ed says:

        Low interest rates has driven demand and prices up all around. Not that it justifies paying the price.

  12. Petunia says:

    The signs remind me of Florida from 2008 to 2010. There were so many signs that developments started to ban them. It was very demoralizing to see a community disintegrate in real time.

    If most of those houses are owned by Chinese investors they won’t care too much about taking a loss. Their aim was to get the money out of China and park it somewhere for awhile. The loss is the cost of doing business.

    • Keith says:

      Depends on the size of the loss

    • chris Hauser says:

      they will care, i assure you. there are no buyers.

      air pocket.

    • Mick says:

      China is next. Watch and see how much they care when they’re taking huge losses in China.

      This is all planned and orchestrated. Weaken the entire global economy, then drop the hammer with China, when the world can least sustain it.

  13. Paulo says:

    It’ll bust, no doubt about it. Vancouver has had runups before and will again.

    However, comparing a good buy between Calgary and Vancouver is an apples and oranges exercise. Would you want to live in Calgary? It’s a wash if you never leave your home and car, but as far as cities go it isn’t even on the same planet.

    In our rural valley houses are selling right now for the first time in years. We are getting refugess from the cities. I suspect they have already cashed out.

    • OutLookingIn says:

      Same happening here amongst the Gulf Islands.
      The change in more density over the past 20 years has been steady.
      Our safe little quiet corner is now becoming busy. We now have a four way flashing red light at the busiest intersection on our island! Wow!

      • Paulo says:

        Oh my God…a four way. We still have just the one set of lights, the red/green on the single lane Bailey bridge. One thing our locals do, including yours truly, is taking great pleasure in never observing stop signs. What’s the point? Not having to obey signage and rules is a major benefit to living here. :-) The problem is reaching down deep for compliance whenever we go anywhere.

        To be honest, I am looking forward to kayaking across the river and introducing myself to our new neighbours when they take possesion this spring. Life is sure varied for us on this forum.

        Regards to all from our soon to be snowy/cold wet coast. The temp is set to drop big time!!

        • Chicken says:

          Those rolling stops save fuel, self-drivers must obey all rules and laws but probably there will be no need for stopping given they’re so darn smart? Should be tons of fun and loads of entertainment….

    • tom says:

      I agree, Vancouver is a piece of shit compared to Calgary. Except for the downtown lower east side, which is lovely.

  14. KrisB says:

    Wolf, the minuscule price drops that you are referring to don’t reflect reality. These numbers are computer generated monsters invented by Lower Mainland real estate board to deceive the public as they have nothing to do with reality. To get more accurate picture one should use average prices. The pictures showing rows of “for sale” signs appear only on recently rezoned or slated for rezoning streets where speculators are assembling land, like Oak, Cambie and Granville streets. They are a lot sparser in the rest of Vancouver. For anyone interested in real estate in Canada generally and Vancouver specifically I recommend podcasts by Ross Kay at Ross knows what he is talking about.


    • nhz says:

      IMHO when the market starts to crash using average prices is even more misleading, because the composition of the properties that get sold might change hugely (even more so if sales volume declines strongly).

      In my country I have seen several times how average prices (determined by actual sales) go UP at the start of a crash because the normal buyers – who often depend on getting 103% mortgages from the bank – quickly are shut out of the market as banks get more cautious and sellers initially refuse to lower prices. What gets sold is the expensive properties of owners who sit on huge gains and decide to sell at a small loss (instead of maybe a much bigger loss later on) to buyers who pay cash and don’t depend on the banks.

      Also, in my area average sales prices at times were all over the place like +20% in one month and -5% the next because sales had slowed to a trickly. If a new development with upscale homes get sold in such a situation (possibly sold on paper only because the homes were already contracted before building start) this can hugely influence numbers. Developers often hurry to finish projects when they think a crash is coming, while normal sellers often take their time before deciding to lower their asking price (often staying behind the market for years …).

      What would be more telling is a repeat sales index like the Case-Shiller index in the US, but those are often ‘slow’. My country has all the data available to produce a timely and reliable repeat sales price index, but the responsible authorities have decided to stick to average prices. Without a doubt because the makes it FAR more difficult to see what is going on, and how much prices have risen over the years.

    • Mick says:

      Well said Kris. Another “real time” source is Steve Saretsky, a Vancouver realtor who runs a blog with much more credible data.

      He even exposes how the VREB deceives with their stats.

  15. nhz says:

    I have seen something similar in my part of the Netherlands around 2008, when sales cratered to just 10-20% of the volume of previous years.

    For maybe a year there were for sale signs everywhere, in some of the smaller villages over 25% of the housing stock was for sale (many of those homes were empty BTW, mostly speculation or ‘vacation’ properties). According to statistics there was sufficient inventory for 30 years of sales. But quickly enough realtors and sellers discovered that all these signs don’t work, most were removed and homes went for sale on the web only (sometimes as ‘hidden sales’ that you only can see when you register with a realtor and pay for their services).

    Although sales volume cratered, sales prices held up extremely well here thanks to lower rates and many government incentives, guarantees etc. and in general very gentle treatment of delinquent borrowers. Politicians also made sure that rents went sky-high after 2008, so selling and renting to wait out the storm was not an option. In my own neighborhood average sales price even increased strongly for a time, because most of the few sales were high end properties purchased by cash buyers, skewing the statistics.

    Despite the huge sales volume drop around 2008, current average sales prices are back to 2008 level again and sales volume has increased a lot but is sill significantly below 2008 level. Lately many homes have been taken off the market because owners are holding out for even bigger gains, and of course this helps to drive up average prices even more.

    Especially expensive properties have lingered on the market for 5 or even 10 years with very small reductions in asking price; sometimes they get ‘sold’ only to go back on the market a few months later because the buyer didn’t get the loan. Most of these equity-rich owners don’t feel pressure to sell (“home prices always go up”) and they feel fully entitled to a healthy profit when selling their home. I know several who arrogantly refused offers that were e.g. 10x their own buying price from e.g. 10 years ago and are still hoping to win the jackpot. And potential buyers are waiting for a correction to buy but are not going to fall for just 10% below the highest price ever, so no deals.

    Nobody budges and although you cannot see it from the outside, I think for many owners who refuse to sell without a fat profit this is slowly turning into some kind of house arrest ;-)

  16. Flipper says:

    Wow, Niko and Tariq must be well known agents in that. I wonder how many listings they have, does anyone think that I can get a volume discount purchasing in bulk? ” hi, I want to buy 50 houses, can I get a 25% volume discount .”

    • MC says:

      Just 25% off? Wait a few months and not only you’ll get your discount, but they’ll throw in a few condos to sweeten the deal.

  17. Can Nuck says:

    We don’t have public access to the sales data in Vancouver. Private information, unlike in the U.S.
    If anyone wants to follow the Vancouver market closely follow Steve Saretsky, he runs a blog and is one of the few realtors out there that is telling it like it truly is.

    Just google his name, his blog is

    Sales are crashing, especially for detached, and prices are sticky right now, hopefully we’ll start to see listings build after Jan 1st, that’s when we might see some price reductions.

    • Bob says:

      Can Nuck, thanks for the website referral. I checked it out and read several articles. I get the impression the real estate industry in Vancouver is doing everything possible to cover up the fact that prices are dropping fast. You wouldn’t see that in the mass market data they carefully cherry pick for publishing.

      • nhz says:

        There are so many possibilities for massaging the raw data…

        The Dutch realtors long ago switched to using ‘buckets’ of similar homes to calculate the average sales price. Nobody really knows the calculation involved, but you can bet it is used to give the impression of steadily rising home prices. Very conveniently, their statistics start in 1985 when the aftershocks of our last housing crash (in 1981) dissipated. Of course we also have the same trick that many US agencies use where initial numbers are always very positive and then often adjusted downwards just before the new numbers come out (when nobody is looking) so that even in a static market they can show price gains every month ;-)

        Said otherwise: “you cannot lose when investing in RE, and it’s always the best time ever to buy a home!”

        In my country reliable sales data is collected by a semi-government agency but unfortunately you have to pay a small fee if you want the data. I have requested some of this data long ago and the difference with the official averages was staggering. Lies, damned lies and statistics ;-(

    • Cyrus says:

      Yeah, I saw Steve Saretsky on a TV discussion about real estate in Hongcouver a few month ago, and I was flabbergasted; “A real estate agent saying there is a bubble?” You expect the real estate agents these days to lie 10 times more than a used car salesman. That’s when I started watching his YouTube videos.

  18. Chicken says:

    I hear(by inference) that Chinese state-owned agencies have been Hongcouver buyers and they regularly operate at a loss, I believe it’s all by design?.

  19. Shawn says:

    Ok, Great, Awesome, flippers in Vancouver getting burned. When can this shit happen in San Francisco?

    • nhz says:

      … and in the rest of the worldwide US Empire, please …

    • TCG says:

      Have a look at for some history of home prices in San Francisco.

      The 2008 incident reduced prices (maybe 20% ?), but as long as I’ve been casually looking at prices they haven’t stayed down below the previous highs for more than a few years in San Francisco. I’m not sure I’d count on any more of a discount than that in San Francisco, even with a crash. A lot of the stuff at lowered prices after 2008 was bought and held by flippers and banks (repossessions) until they could make a much bigger profit after prices went back up again. You’re smart to buy when there is a crash, even if not a huge one, and if you’re serious about wanting to live here long term. I believe prices in some of the further suburbs or cities like Oakland went down more than SF in the years after the 2008 crash.

      Areas such as Palo Alto are much worse because prices have appreciated more and they’re much more NIMBY about adding inventory than SF. Believe it or not, SF has been doing much more of its part to add housing (especially with condo building) than many other bay area communities. It is part of the reason it’s now turned into a bedroom community for silicon valley, which never used to be as much the case. That and the buses make it easier, and the young tech yipsters want to live here and not in a car suburb.

      SF has been pricey for at least 30 years compared to the national average. I remember being floored at 300k house prices in 1990 when things in my nearby state were 100k. Now things there are 200-300k for moderate homes and basic things here are 1.1m. It’s gotten a bit worse, but it’s never been a cheap place to live as long as I remember.

      • HB Guy says:

        Your price analogy is a very good one. I remember prices in the Bay Area being much higher than other California metro areas when I first moved here in 1990, and the gap has only widened since then. This isn’t unique to California: consider London relative to the rest of the UK; Sydney to the rest of Oz; Hongcouver and Toronto to the rest of Canada, eh! Or for that matter, NYC relative to the rest of IOUSA. These cities have become magnets for international capital, largely Asian, and are leading cities in their respective countries commercially or culturally, like it or not.

        Comparisons of the Bay Area to, say, Nevada or Arizona are relevant only to the extent that one may want to relocate there. Most of the people who’ve moved to the Bay Area or the nicer parts of Southern California chose to do so because of job or business opportunities, quality of life, climate, educational institutions, etc. The same can be said of London, Hongcouver and Toronto (their climate excluded) and Sydney.

        I agree that prices could correct in each of these markets, but the extent is likely to be limited unless a much more fundamental shift in the relative importance of each area to their national economies takes place. I doubt that Silicon Valley’s relative importance to the California and US economies will change much in the next few years, or that of UC Berkeley, Stanford and other educational institutions. The same is true to a lesser extent of the economies of coastal LA, Orange and San Diego Counties.

        All of which is to say that prices may fluctuate, but they’re unlikely to crash significantly (2008 was a multi-generational buying opportunity in California). Given a forecasted increase of 8-10 million in CA’s population by 2050 (both from natural and immigration sources), a scarcity of available land in coastal areas and the quality of life, it’s worth keeping Bob Hope’s advice concerning California real estate in mind: drive to the end of the Freeway, and buy all you can.

        • DEB says:

          I don’t know how California can increase its population by 8-10 million people by 2050…..Didn’t I hear California experiencing severe, severe drought now? How in the heck is this sustainable…do a rain dance and hope that rain will fall enough to fulfill the needs of its inhabitants? I foresee RE prices dropping because of this? Unless huge desalinization plants are built, I don’t see this happening. Remember the Great Dust Bowl of the 1930’s and 1940’s?

        • Wolf Richter says:

          85% of the scarce water in CA is used for agriculture to feed the nation (produce) and the world (almonds). Urban populations use relatively little water.

  20. Midnite toker says:

    I’ve been looking at condos in the suburb of Vancouver where I live and prices are still ridiculously high for what you get – $300k for a decent 2 bedroom apartment.

    I guess I’ll just keep renting this place as long as I possibly can

  21. Cain says:

    These are properties that are group sales for condominium development. Property owners are approached by the realtor to sell their houses together. These have sold. Huge condominium developments are still underway and many of them have replaced a row of single detached homes. This article and its photos are missing the mark in this regard.

    • Wolf Richter says:

      Did you read all the way down? The last two pics are precisely those of a land assembly, before and after, with some additional details on prices. But that doesn’t change the simple fact that these houses are FOR SALE, all of them, no matter who buys them.

      • Cain says:

        Ok, yes. But to be clear all of these swathes of homes together are ALL part of land assembly development deals. I live in Vancouver and have seen them around main traffic corridors. Development is NOT slowing down in Vancouver. It is DOUBLING DOWN at a rapid rate. They will rubber stamp the zoning.

        • Wolf Richter says:

          Oh, I agree with you on development … that it isn’t slowing down for now. And I’m also with you that the city will likely rubber-stamp the rezoning. We’re on the same page on these topics.

  22. Bill says:

    My wife and I lived through this exact thing from 2008 to 2012 in South Florida – it is a bloody mess and it will last way longer than anybody is predicting. Given the size of the bubble, it will take at least until 2022 before prices turn back up. Towards the end foreclosure sales for cash will be only thing moving. Sorry to be a scrooge during the Christmas holidays, but better to prepare now, because it is going to be a long haul.

  23. AF says:

    I’m waiting to buy in the Greater Vancouver area so i’d love to see a slump….but i doubt how much prices can come down.

Comments are closed.