Market Update: Vancouver Real Estate - Spring 2022 

You're welcome

hard to say; those are most likely the new first time home buyers that have 0 equity in their homes (likely negative equity if it goes down), who stretched themselves way too thin on adjustable mortgages during the midst of the pandemic. A lot of those folks were panicking and trying to get into anything they can; so they went and borrowed way more than their income should in theory allow them to (mostly cause rates were at 1.5% prime). Now that rates are going up, their monthly payments are about to go up 400 to 600 per month, depending on how much they borrowed. Keep in mind, that's POST-TAX income out of pocket every month; that's 5k to 7k per year. Given the median income in Vancouver is a meager 70k (and first time home buyers typically have a lower than median income), these people better be getting a 10%+ annual pay raise if they want to have the same standards of living; but we all know that with rate hikes, you'll be lucky to still be employed, forget pay raises or promotions. So in conclusion, I think a 15% decline is highly unlikely to begin with. But if it does happen, I don't think the 1 bedrooms are any more insulated. If anything; they might be the first to topple as plenty of speculators and people who can't afford it got in during covid with ultra low rates at purely adjustable rates. Houses on the other hand are interesting; because the typical buyers are the fucking boomers who refuse to die. Jesus; they sat on their house for the past 20 years and turned their 100k house they bought in 1980s into a 2 million dollar shit hole house just cause they happen to be in a good area in Vancouver. Those people have a fully paid off mortgage; and when they sell a house to move into a slightly bigger house, they're taking on actually very little additional leverage given the amount of equity they built from the last 20 year boom. I personally think it's the new kids on the block that are once again going to get cucked by the older generation.

I believe that too Jay ! 👍