This is the crux of the matter. US and Canadian incomes will fall; Asian incomes will rise. In the meantime, there will be more unemployment coming here, and without a doubt downward pressure on incomes… and house prices… and rents.

Many people in Vancouver are in denial because they put all their eggs in to their real estate basket… everyone was saying, you better get in or get left behind.

Let’s remember that a house is a depreciating asset… it rusts, weathers, and falls into disrepair, not to mention falling out of style (and energy-efficiency rating).

Why should a house cost over 8 years of earnings, when it takes less than a year’s labour equivalent and perhaps another year’s worth of material cost to build? And those costs will surely come way down with the end of the construction boom.

Correct. BC frequently feels like an ersatz California. A much blander, scrubbier, tattier version. It even has its own poor man’s wine region. The Okanagan doesn’t hold a candle to the Napa/Sonoma area.

Don’t get me wrong; I *like* BC. But it is by no means “the greatest place on Earth”. People who think otherwise SERIOUSLY need to get out more.

Total and utter bollocks.

“Liveability” as defined by The Economist is totally different from the factors that draw large numbers of people to a city. Vancouver is a clean, orderly city with some nice local skiing and hiking, and some horribly boring architecture. It is not “world class” by a long shot: it’s essentially full of mildly affluent rubes. It is a million miles from being any kind of centre of power, money or culture. It’s an easy-going backwater with an over-inflated sense of its own greatness. Try living in some REAL cities (NYC, London, Tokyo, Chicago, Sydney) and you’ll be in doubt as to the difference.

The fact that Vancouver is a desirable place to live will be reflected in the extent to which, even after they fall 15-20%, prices in Vancouver will still be substantially higher than those in less desirable markets where prices are *also* falling.

When real estate bubbles burst prices drop severely, as they’ve done in the US. Speculators leave in droves and homeowners have negative equity – I wouldn’t want to be renegotiating with a bank in the next few years. These 2 factors put severe pressure on prices. Regarding BC’s status as a great place to live artificially inflating house prices, if home prices in California have caved, prices will cave in BC. BC’s nice, but it has nothing compared to some areas of California.

And by the way, the Case-Shiller index, which tracks the price of real estate in 20 US cities, showed that between 1895-1995 housing prices increased by the the inflation rate. There was no capital appreciation in the long term. What’s happened in BC (and the world for that matter) is unsustainable.

Read a similar article a few weeks back about a BC Condo developer who was dropping prices 40%. As I read further, I though it sounded like a bottom was being made but then they said teh developer had dropped prices from 390 sq ft to 280 sq ft.

Did not realize your market was this over valued. Still a long way to go on the downside.

Vancouver has astronomical real estate prices because it is one of the most desirable places to live in the world

http://www.cbc.ca/canada/british-columbia/story/2007/08/23/bc-vancouver.html

its more desirable than Manhattan or San Fransisco or London for too many reason to site in this post just read the Economist livability index

because I don’t think you realize how good you have it

“that is if they don’t blow up their penthouse with a meth lab.”

You lost your footing there. You were discussing pot dealers and growers. The meth crowd is a different group.

Just a correction, this Demographia study was not for the world, just the main, developed English speaking nations, 6 countries.

“doubt I will ever see another place quite as wonderful as Spanish Banks at low tide in July.”

Wow, don’t get me wrong, I like it a lot, but it doesn’t hold a candle to the better places I’ve seen. It’s imported sand, with muddy low-tide sea bed. Do you also appreciate the up close view of all the tankers loitering in the Bay?