Royal LePage would only cop to a 3% decline due to weakness in the luxury market. (By the way, your average prices should be the luxury market, one sign of structural issues in said market.)
Vancouver house prices to decline further, real estate panel predicts (updated)
Housing prices are about 10 times average family incomes, Guatieri said, putting "Vancouver in the upper echelon of overvalued housing markets, not just in Canada, but across the world."But only a five percent drop off that? Over twelve months? Does he have a mandate to prevent panic?
"There is some speculation that wealthier foreign buyers are waiting to see if the government will restart that program before they purchase a house in Vancouver," Guatieri said. "What has supported Vancouver's housing market, at least in the past five years, is not income, it's wealth. A lot of that is foreign wealth, although we can't quantify that."Which brings us to the Suitcases full of Cash article on Yahoo Suitcases of Chinese cash flooding Canada’s borders (Hat Tip Anonymous commenting at Vancouvercondo.info)
Nearly $13 million in cash was seized during that period, the newspaper reported, citing Canada Border Services Agency data obtained under the country's access to information legislation. Most of the money was returned. In one case at Vancouver's airport, a Chinese man was found with $177,500 in the lining of his suitcase and stuffed into his wallet and pockets. He was fined. The financial penalty was roughly $2,500, a relatively small price to pay for evading strict foreign-capital controls imposed by Beijing.Back to the Sun article:
Royal LePage forecasts that fewer high-end sales will cause average prices in Vancouver to drop three per cent by the end of 2013. Nationally, Royal LePage forecasts a one-per-cent gain in the average home price by the end of the year.Let's look back at what Royal LePage predicted for 2012, shall we? Royal LePage Predicts Further Home Price Appreciation Contrary to Recent Talk of Decline
Royal LePage expects average price growth to continue through 2012 and predicts national average prices to increase by 2.8 per cent by the end of the year.Let's see how they did. December to December 2011 to 2012
. . .
At the end of 2012, average house prices in Ottawa are forecast to be 3.3 per cent higher than 2011.
. . .
At the end of 2012, average house prices in Toronto are forecast to increase 2.6 per cent over 2011
. . .
At the end of 2012, average house prices in Vancouver are forecast to be 2.3 per cent higher than 2011.
Ottawa all prices were up 1.22% and residential class were up .6%
Toronto all prices all TREB were up 6%, detached up 6.2%, Toronto detached up 2.9%.
Vancouver is up 1.3% on average according to yattermatters.com's numbers.
I don't think Royal LePage imagined how lofty Toronto could get. Median prices in Toronto are down 6-14% since April, depending upon area/type.
Vancouver's average is down 14% since February, which show you how volatile averages can be. February's numbers will be a better comparison to last February. Vancouver's prices have not shown a strong annual cyclic behavior (sales and inventory have, but not prices).