Is a 40% Correction Coming?

For every 100 basis point hike (1%) in borrowing rates, home prices would need to come down a corresponding 10% to match affordability. Do I think Vancouver home prices are headed for that type of correction? So far condo prices have barely been touched and affordability is at an all time low. The main reasons is inventory which remains ultra low as sellers are holding firm for now.

Thanks to all the viewers and commenters on all my videos. As a busy Realtor I may not have the time to reply to all comments here. Some of your questions can be answered by going through my many videos posted here on my channel. But I will do my best to respond when I can. Appreciate everyone who is watching and commenting!

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OWEN BIGLAND
MACDONALD REALTY WESTMAR
c: 604.889.1118

2018 - 2022 Medallion Club Member, Top 5% of Greater Vancouver Realtors
2018 - 2022 Macdonald Realty Westmar, Top Producer in Annual Sales

VANCOUVER BC HOMES & CONDOS
GREATER VANCOUVER BC REAL ESTATE FOR SALE

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[bauyrzhanazimkhanov]

You are legend Mr. Owen Bigland.
Your channel is one of the oldest YouTube channel with correct information about investing, real estate and economics without water, white noise and clickbaiting.

[freedomliberty]

Another great video Owen. I am also extremely bullish on Vancouver real estate. I have owned my principal residence for 14 years now and I finally plan on purchasing an investment unit, probably somewhere downtown in the next few years. I will be sure to give you a call.

[johnnyboyvan]

Brilliant 👏 as always, Owen. I love my condo in Kits and am content with not one single debt. I agree buy your principle residence and let it grow and grow. 200s to 900s.

[erikjensen]

Great vlog Owen. Thanks for always being so optimistic and positive. I really appreciate it!

[paulsandhu]

Good commentary. It’s a crap shoot depending on which way the BOC steers the money supply. Credit is still relatively loose, so I wouldn’t be surprised to see another spike in prices later in the year!

[rezar]

Really great video!!! You always give realistic advice and very consistent message over the years!! Thanks for the great content!

[jaysupply]

Thanks 😊 for the wonderful advice!!!! Honest and thoughtful.

[LC-hvqn]

Chilliwack detached is a good 22% or more down in price. And there is more of a correction to come.

[stephenfermoyle]

oh look, someone else is talking!! all people had to do was hold years ago and listen to someone like you with sound advise.

[justincote]

Owen is the best kept secret on YouTube for CAD RE

[CokeDrinker]

20% is accurate for Langley since last years peak.

[bgill]

one thing i learned on this channel is to buy your principal residence first then buy quality regardless of market conditions

[smartfunds]

Owen, keep the positive side, we don't care about other channels, we trust you.

[vitalidmitrenko]

Referencing the end of your video where you talk about historic interest rate averages. I think historic interest rates don't mean much unless you add the context of how much leverage people were taking on in order to own a property during those times. As an example, if an avg. detached home price in metro Vancouver is currently around $1.8M, 35 years ago when the the interest rates were high, that detached home on avg. was 200k. Using bank of Canada interest as reference, paying 12% on 200k (24k in interest) vs paying 4.5% on 1.8M (81k in interest). Obviously we have to take into account that salaries and cost of living went up in 35 years, but even if we account for those things, I think people are paying more now at 4.5% than the people who paid 12% 35 years ago. I suppose anything is possible but I'd imagine we are approaching the limit to what they can raise before people can no longer afford to pay interest rate on the giant mortgages that people took out for owning their homes in Vancouver (assuming they bought within last few years).

[briansmith]

I would expect pigs to start flying before this would occur. Not happening.

[T.dot.]

Lots of perma bears and doom & gloomers on other channels. They will stay lifetime renters.

[sergeyc]

Why not do it) Try it. Stay positive. And hype a bit)

[jtome-]

Hmmmm probably not but 10 percent seems reasonable . I locked in at 5 percent for 2 years it is what it is .

[savvyinvestor]

There's already been a 20 percent decline since last year

[Stom-Troop]

Cost of living has risen and incomes have not been able to keep up. Foreign investors are out, so did the Vatican and Blackrock companies. I am not seeing much of impact on this yet, but what we know for sure is that there are less buyers in the market now as they exited the market and are holding onto their dear cash right now. Also more buyers are out due to the fact cost of living increased along with the spiked mortgage rates. This means there are less buyers in today's market than ever before in this crazed market. Also, job recession is very near as per many economy experts out there. Factor these in with record low inventory, what I think of abnormal is that we haven't bottomed out yet and is long before, unless Fed starts printing money again, which I don't think is going to happen as the governments will need a really good excuse to do that. What do you guys think about this and what is your projection?