Quote:
Originally Posted by whatnext
You inadvertently identified the problem right there. Sellers (individual and developer) have become so used to the ridiculously inflated prices driven by forces created by our incompetent gov't that they just cant see the prices those earning a regular Canadian income as "normal".
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That's how the property market has worked for decades. High prices are always sticky - owners who want to sell will try to avoid taking what they perceive as a 'loss' (even if they paid a lower price for their home years earlier).
At least there's currently some modest pressure for prices to stop rising, and maybe even fall. Some homes have to sell - death, divorce, moving away - and with buyers unwilling or unable to pay as much, that will see fewer sales overall, but also falling prices. (In Vancouver, house prices are still going up a bit, and apartment prices are falling, a bit). Overall, accounting for inflation, apartment prices are now cheaper in Vancouver than they were 7 years ago (and than most of the past 7 years). They're only less affordable to buyers needing a mortgage, because interest rates are higher.
'Investors' who bought to rent (getting less in rent than they are paying back on their loan) on the expectation of capital appreciation are now faced with higher re-financing costs, and little or no capital gain, so some of them are selling too.
It's not like the pre-owned homes on the market are likely to be empty. Both Vancouver and Toronto have empty homes taxes, so either the owners are still living in their homes, and hoping to sell, and move, or they're renting them out. If they're paying the empty homes taxes it's helping to get non-market housing built.
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