VANCOUVER (NEWS 1130) – An end to the spike in Vancouver home prices is not on the near horizon, according to a bank economist.
“Odds are that if this kind of price growth [especially Vancouver] continues, it will end badly but that still looks to be sometime down the road,” says Robert Kavcic at the Bank of Montreal, who is looking at numbers in both Metro Vancouver and Toronto.
Kavcic looks at five factors that might produce a downturn but aren’t right now. He says an economic slowdown and surge in unemployment are “not likely anytime soon, with growth in BC and Ontario leading the country.” He also says interest rates remain low, more condo supply is coming to the market and further government policy tightening is “a no.”
On the fifth issue, affordability, Kavcic adds, “the concern is that rising prices don’t slow activity, but rather beget even higher prices. The Vancouver condo market might be heading down this road now.”