Some of the data is pointing to a Vancouver real estate price freefall

car thinkerNow that the 15% property tax in Vancouver is starting to bite, we see the commentary swing the other way. DATA: Is the Metro Vancouver real estate market in free fall? The article discusses the starting/possible serious decline in real estate prices in Vancouver. It’s interesting to see that the decline was already starting when the 15% real estate tax was imposed.

The Zolo real estate brokerage numbers already show a market in decline. Add to this the noise that is starting to come from the United States on an interest rate rise things begin to look less positive for Canadian real estate markets.

Perhaps this is the beginning of the end. Perhaps not. But as I mentioned elsewhere, the real risk to the market is the rapid increase in outstanding HELOCs or home equity loans. Any increase in interest rates will begin to bite immediately as the loan are indexed to floating interest rates. If Canadians are tight on cash flow, here’s where it starts to hurt.

Canadian Stock Markets

Interestingly enough, Canadian stock markets have bee strong of late but are showing weakness once again because of oil prices. It also seems that investors are becoming a bit leery of Canadian bank stocks because of their vulnerability to Canadian real estate. This caution is not misplaced. A whole lot of things may go the wrong way at the same time to impact the results of the banks.