It seemed the property market in and around Vancouver had come to a point where people just couldn’t pay any more for real estate.
And so, prices had actually ended up on a downswing in 1982.
“A year ago, housing prices were sky high — it cost so much to buy a house in Vancouver that most people simply couldn’t afford it,” the CBC’s Knowlton Nash told viewers on The National, as he introduced a report on the market conditions on Aug. 18, 1982.
“Now, even with interest rates coming down a bit, the combination of historically high rates and tight money is beginning to force down the cost of housing.”
Falling prices
As of August 1982, John MacLachlan had seen the value of his Vancouver home fall by $60,000, as the market changed after he bought the previous year. (The National/CBC Archives)
John MacLachlan was among the homeowners who had bought a property at the height of the market.
In 1981, he’d paid $235,000 (the equivalent of more than $650,000 in 2020 dollars, according to the Bank of Canada inflation calculator) to buy his three-bedroom home.
A year later, its value had fallen by $60,000.
“I like the house. The area is one that I always wanted to live in and I could afford it at the time, albeit marginally, and as long as the economy doesn’t wreak complete havoc either with my income or my wife’s income, we’ll be able to continue to afford it,” MacLachlan told CBC News.
Rising risks for some…
Various factors were causing the cost of housing to recede in Vancouver in 1982. (The National/CBC Archives)
Reporter Georges Tremel said that was the kind of situation that could get people into trouble, where a loss of income could leave struggling homeowners looking to sell their home at a time when prices were falling.
“The loss of an income can be disastrous,” Tremel explained to viewers.
“Selling the house can be impossible, if it has lost so much value it is worth less than the mortgage on it. Real estate agents won’t list it and nobody will buy.”
Tremel said the decline in prices had followed a peak that ended amid high interest rates and lowered demand — a phenomenon The Nationalhad been following the previous summer.
…but opportunities for others
A drop in real estate prices had made it possible for Carol and Garry Butcher to buy a home in Port Coquitlam, B.C., back in 1982. (The National/CBC Archives)
The flip-side of these conditions was that those who were able to buy might be able to purchase a home at a lower price than they expected.
Like Carol and Garry Butcher, who bought a three-bedroom home in Port Coquitlam, B.C., for less than two-thirds of the comparable asking price from the previous year.
“It really scared us to all of a sudden be this much in debt,” Garry Butcher told CBC News. “But we’re happy we did.”
Carol Butcher said the couple “had it all worked out that we could manage on one salary,” should their situation change.
A path to recovery?
Georges Tremel said Vancouver homeowners who bought at the market’s peak would have to wait to see how long it would take to recoup their losses — if that were to occur at all. (The National/CBC Archives)
Tremel said the Vancouver-area market appeared to slowly be returning to normal prices.
“That’s fine for the families who bought before the boom or are buying now,” Tremel said.
“The families who bought at the peak can only wonder if and when they will recoup their losses.”
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
