"Home prices will stay about the same in 2012."
Over half of the respondents to REW.ca's survey of Vancouver-area home buyers and sellers (54%) agreed with that statement, putting them in agreement with the majority of experts who are also predicting a flattening of the market or slight decline, but no disastrous implosion, despite this region's uncommonly high real estate prices.
We surveyed people throughout the Lower Mainland, from Hope to Pemberton, who had either bought a home within the last three years or planned to buy within the coming three years, and here are their thoughts about home prices in Vancouver and area for 2012. (More survey results here.)
This REW.ca survey is part of a larger poll focused on local home buyer and seller behaviours and beliefs.
Full results of this survey will be released January 5, 2012 and will include: preference for resale or new development homes; type of home preferred; ideal home location; maximum commuting times accepted, and willingness to compromise and on what.
Meanwhile, here's a quick summary of Lower Mainland real estate predictions from lenders, real estate boards, think tanks and assorted indie experts.
Click here for our detailed real estate forecast for the Lower Mainland.
CMHC predicts small drop in Fraser Valley prices in 2012
Vancouver Real Estate Market Quotes
The Canadian Mortgage and Housing Commission has these predictions for MLS® prices and sales.
CMHC Metro Van Prices Metro Van Sales Fraser Valley Prices Fraser Valley Sales
home prices in Vancouver area stabilize
2% 9% flat
House prices in Vancouver and Lower Mainland dip
-3%;
"Rooted in a deeper, diverse economy, constrained by physical geography and land-use provisions, and heavily buoyed by higher-end single-family home and 'ripple-effect' residential-investment purchases by foreign home buyers and investors, the 'iron bubble' refuses to pop, so far."
Landcor Data Corporation, November 2011
"... with the continued 'bubble' talk by economists based thousands of miles from here, our analysts made a conscious effort to determine the amount of standing inventory (of new multifamily homes) and assess whether these concerns are warranted. We do not think they are as: a) inventory levels do not present a concern at this time b) any speculative buying that is typical of a growing bubble represents a microscopic fraction of the total buying activity taking place today, and c) investors are taking a much longer term approach with their purchases, unlike 2006 to 2008 when most investors had no intention -- and in many cases no ability -- to close on their purchases.
home prices in Vancouver area stabilize
Urban Analyitics Inc., October 2011
"Vancouver will not be the hottest housing market in Canada in 2012. Despite the intense focus on the city as a bubble candidate as far back as 2010, Vancouver still saw the biggest average price increases (+16%) and the biggest real estate volume gains (sales & price gains combined) in Canada this year (Chart 5). That won't be repeated next yearthere are already clear signs that sales are dipping, and price increases are starting to ebb. Toronto has seized the mantle of hottest major market in recent months, and appears to be at some risk of overheating. Meantime, the award for most well-behaved market is a tie between Calgary and Edmonton, which have seen stable prices in recent years even as Alberta easily recorded the strongest employment growth in the country in 2011. Assuming oil prices hold around $90 or better, look for those two cities to lead the way for hottest housing markets in 2012."
House prices in Vancouver and Lower Mainland dip
BMO Capital Markets Economic Forecast, December 2011
Canadian Real Estate Market Quotes
"The cycle of rising real home prices is long, lasting on average 12 years. Italy's boom was the shortest at 8 years, while Ireland and Sweden count 15 years. Canada's ongoing housing boom is in its 13th year.... the Canadian housing market remains an outperformer among advanced nations, with real home prices up 4.8% y/y in Q3. While the sector's continued buoyancy is impressive, monthly data through November suggest prices have leveled off since the spring, with conditions in the majority of local markets in 'balanced' territory."
home prices in Vancouver area stabilize
Scotiabank Global Real Estate Report, December 2011
"The housing market will enter 2012 in a position of moderate overvaluation in existing home prices and an overhang of unsold inventory in the new home market. We anticipate that these excesses will unwind over the next few years, partly reflecting prospects for a normalization in interest rates beginning in 2013."
home prices in Vancouver area stabilize
TD Economics, December 2011
"Lower interest rates will continue to support consumer demand, but rising debt levels, flat income growth and fears of unemployment will likely put some downward pressure on prices and activity."
home prices in Vancouver area stabilize
Teranet National Composite House Price Index, December 2011
"We expect housing investment to contract about 5 per cent in the first half of 2012 as the economy flirts with recession, and housing starts to trend down to more normal levels by the end of 2012.
home prices in Vancouver area stabilize
"Under the more adverse scenario outlined in our economics year ahead, the Canadian housing market would likely experience a hard landing as it is highly leveraged to jobs and income growth. Moreover, the household balance sheet is stretched and highly susceptible to adverse shocks. A spike in the unemployment rate would certainly lead to a pull-back in credit demand and leave the multi-unit market significantly over supplied. This market would also likely result in a rise in delinquencies and forced selling, which would see homes prices decline by around 10 per cent."
Bank of America Merril Lynch, December 2011
"After surging in 2010, growth in private consumption and residential construction has moderated, reflecting slower growth in household incomes and consumer credit as well as tighter mortgage rules.
House prices in Vancouver and Lower Mainland dip
"The construction boom seems to be cooling off as residential investment has weakened, although housing prices have resumed their appreciation trend in recent quarters and are well above pre-crisis levels in most regions, and existing home sales rebounded strongly, particularly in British Columbia and Ontario."
International Monetary Fund Canada Country Report, December 2011
