Vancouver could be in for its third real estate bubble burst in 50 years, according to a study released yesterday.
Falling home sales suggest people cannot afford to pay more for housing, the Canadian Centre for Policy Alternatives report says.
In a worst-case scenario, Vancouver homeowners could see a 20 per cent depreciation in their properties over three years. That’s the equivalent of nearly $200,000 on the average home. New homeowners and young families would suffer most, the report adds.
The Canadian Centre for Policy Alternatives report says the steep rise in house prices — which now sit at 4.7 to 11.3 times Canadians’ annual income in many cities — is an “accident waiting to happen.”
It would take only a one to 1.25 per cent mortgage rate increase by Canada’s big banks to cause a housing crash similar to the one the U.S. is grappling with, according to the report.
with files from the canadian press
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