Will There Be an End to the Vancouver Real Estate Bubble Fatigue?

Reports show that the Vancouver Real Estate has had price declines several times now since 1980’s. The fifth time is here, and seems to be staying in for a while. Has this trend formed what is called the Vancouver Real Estate Bubble Fatigue?

Wikipedia describes real estate bubble or property bubble as a type of economic bubble that occurs periodically in local or global real estate markets, and is characterized by rapid increases in valuations of real property (such as housing) until they reach unsustainable levels relative to incomes and other economic elements, followed by a reduction in price levels.

The constant price dips, have resulted to more experiencing a bubble fatigue. And even with an evidence of a small but significant increase in the sales to active listings–ratio conveyed by the Greater Vancouver Real Estate Board—still, several believes that a bubble fatigue would still be seen in the next few years. As such, many are on the lookout when this shall end?

Will there be an end to the Vancouver Real Estate Bubble fatigue?

Normally, real estate costs, rents and wages most likely will change consistent with the long term features. Housing markets will usually have house prices rising at around the same rate as price increases and incomes. However, if house prices are increasing faster than earnings, this means that there is a spurt of credit initiated to the market place. Since the wages of prospective clients cannot meet the demands of the rising real estate market price, this would result to a lesser volume of prospects buying real estates. Such trend would, eventually, force real estate sellers to cut prices off their properties. But are they willing to make another price cut? There would be repercussions as a result of these changes. How should we deal with it?

In my opinion, for every problem there is a solution. But only time can tell if there would be a definite end to the Vancouver Real Estate Bubble fatigue.

What do you think?

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About Jean Seguin

Jean Seguin has written 301 post in this blog.