Quote:
Originally Posted by 68style
I mean, Mark you’re acting like I’m ridiculous here but where’s your community cutoff? Are you ok at 30% drop? 60%? 80%? Your mortgage remaining is more than the value of your home and you can’t renew anymore but everyone else can buy a place? Are you still singing the exact same tune about community?
Extreme? Yes... but just the reverse side of the same argument. You just don’t think it will ever get “that bad” same as I thought prices wouldn’t drop for awhile.
At some point yes you do have to look out for yourself.
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Prices will never drop 60% to 80% in Vancouver because there is an inherent value to housing in Vancouver largely based on the difference in cost between renting and buying a house or apartment. There is a price premium on top of that because Vancouver is a desirable city to live in Canada and also for people around the world.
Having said that do you think it is reasonable that a condo that rents for $3,000 a month costs $1,000,000 to purchase? After property tax and maintenance and assuming a healthy 25% down the owner is losing about $1,000 per month but is willing to absorb that on the assumption and gamble that prices only go up. Take the speculation of price increases (and parking of foreign money) out of the equation and the price should stabilize to reflect a cash flow value with a reasonable amount of price appreciation of 3% to 4% per year and price premium to live in Vancouver.