The Hongcouver | Vancouver house prices took a record fall, so is the market really ‘steady and stable’?

Has volatile housing market been affected by the cancellation of immigrant investor scheme?

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Homes in Killarney suburb in Vancouver. Photo: SCMP

Published: 9:00am, 7 May 2014Updated: 11:52am, 23 Feb 2016

In March 2014, just a few weeks after the Canadian government announced it was shutting down the Immigrant Investor Programme, average house prices in greater Vancouver suffered their biggest month-on-month fall on record, plunging more than 11 per cent. This came amid a three-year period of price volatility so severe that it has never been matched in the history of the city’s real estate market.

Wait, let me try that again. In March 2014, just a few weeks after the Canadian government announced it was shutting down the Immigrant Investor Programme, the Home Price Index (HPI) for greater Vancouver continued to rise to near-record levels, amid what real estate board chief Ray Harris called “steady and stable market conditions”.

Which of the preceding paragraphs is accurate?

Both of them. And therein lies a problem for anyone trying to get a handle on Vancouver’s property market, and whether the cancellation of the Chinese-dominated Immigrant Investor Programme (IIP) is a game-changer or of utter irrelevance.

The apparent disconnect between average prices and the Real Estate Board of Greater Vancouver’s (REBGV) preferred price metric, the HPI, has been noted on plenty of occasions. In contrast to the average-price calculation (total sales value divided by total sales), the HPI employs a sophisticated formula to track the price of a typical or benchmark property, creating a “like-for-like” price comparison. The 26-page explanation of its formulation describes it as “a reliable, consistent, and timely way of gauging changes in home prices”.

Critics have dubbed it the “Franken-number”. That’s a little unfair, since the reason for devising an alternative indicator to average prices makes perfect sense: Average prices do not take into account month-to-month variance in the type or location of homes being sold.

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.css-1m2rp1p{color:#34b8b5;}The Hongcouver | Vancouver house prices took a record fall, so is the market really ‘steady and stable’?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Has volatile housing market been affected by the cancellation of immigrant investor scheme?

The Hongcouver | Vancouver house prices took a record fall, so is the market really ‘steady and stable’?

Has volatile housing market been affected by the cancellation of immigrant investor scheme?