Ok folks, time to look over the lay of the land.
We have had 10% average price declines in Vancouver and every bank and his dog has now come out saying there will more corrections ahead (mild ones though -only 15%!) but no collapse.
Remember we do not want a collapse. That is what happened in 2008 and Flaherty and Carney opened the helium nozzle. We want slow and steady.
Could this be it?? We have been defeated so many times that it is hard to get too excited. Let us watch inventory. At this time of year listings taper off and people pull their homes as they go on holiday. You can see this clearly in the inventory graphs linked. The first sign that 2008 was very different, was that this drop over late June, July and August did not materialize. Sales dropped so fast that even with the summer removals, the inventory kept going up.
Lets see what 2012 has to bring.
In any case if we do get a correction, there is very little ammunition to reverse things. Rates are too low already. Everyone now admits that the CMHC was part of the problem and puts our national fiscal house in perilous danger and to drag them out of the penalty box would be a major policy reversal. Same with the investor immigration program which is finally being tightened up. Just leaving a few hundred thousand as an interest-free loan with the Provincial Government and then buying a house in another Province is finally being regarded as stupid policy! No kidding. Entrepreneurs are what we really need.
So the wind is our our sails. Carney, who is not under the same pressure from the RE lobby, has finally woken up to the bubble he helped create and harps on about it at every chance. That legacy may be more fragile than first thought.
Enjoy the rest of Junaury.
