Sales are markedly weaker than last year, led by a significant drop in detached sales. Attached and apartment (i.e. condo) sales are still alright, but not as robust as last year (which was a very good year for sales, so we shouldn't lose that perspective!)
New listings are now quite robust and inventory growth has picked up. A very early June read indicates sales remain tepid.
Ben Rabidoux has suggested that we are seeing similar behaviour to 2012, another year that was fronted with regulatory changes affecting housing demand. He outlines that there are of course differences between the two years' states. From my perspective, 2018 is different in a few ways:
- Prices have increased by most affordability measures
- There are fewer newly completed unabsorbed units
- For-sale inventory is significantly lower
Nonetheless, we are looking at a much cooler market in 2018 than most past years and that looks to continue for some time.
Should we be concerned about a prolonged housing recession? I'm concerned that it will be tough on a lot of people who are heavily committed to real estate investments, but despite the impending hardship that may start showing itself, I don't think a large downturn will be all that satisfying for people who have been bearish since I started blogging in 2007 -- hey you were right but that took a really long time.
In the long run I'm not overly concerned. Canada, and Vancouver, has a lot going for it, including a young edumacated population and a well-thought-out immigration program that is seeing its quotas increase, both which will be positive for household formation over the next couple of decades. That does not necessarily mean housing is a good investment, it just means I don't think the end is nigh.
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