Real estate prices to drop by double digits, risk agency says
On Behalf of Porter Ramsay LLP | May, 19, 2020 | Real Estate Law
Investors aren’t going to like the recent real estate market forecast. When assessing global risk for wealthy investors, British Columbia and the rest of the country was hit hard by yet another global risk agency: that real estate prices will continue to drop by double digits. Numbers are gathered around unemployment rates which will hit 14% — or the adverse rate — by the year’s end.
Many more mortgages are going into arrears as homeowners struggle to keep their heads above water. In fact, experts suggest they will reach new highs. Arrears are expected to drop to levels seen in the 80s, matching the nation’s worst housing crash. Mortgage arrears in British Columbia are expected to increase by nearly 500%.
Housing on the west coast is about 18% overvalued and about 20% overvalued in all of Canada. Analysts expect about a 10% pullback around the country. In an adverse climate, prices are expected to fall about 15% from last year’s values. In Vancouver, prices in 2019 were down 10% from 2018 — a continued slide from peak levels.
There are many things that affect real estate sales and prices. Some of these — like unemployment rates — can have an adverse effect. However, no matter what is transpiring at any given moment, British Columbia residents continue to buy and sell property. With those deals comes the need for legal services. A lawyer is an integral part of a real estate transaction since it is a lawyer who sees that a deal is closed in keeping with the laws of the province.