Past Price Declines in the Vancouver Real Estate Market

In the past 30 years the Vancouver area has witnessed 4 major periods of real estate price appreciation and 3 subsequent periods of price declines. We are awaiting the 4th subsequent period of price declines which seems to be starting now.

For the historical perspective:

In nominal dollars:

From 1975 to 1981 real estate prices in Vancouver rose 240% and subsequently declined 35% over 18 months.

From 1982 to 1990 real estate prices in Vancouver rose 115% and subsequently declined 11% over 12 months.

From 1991 to 1995 real estate prices in Vancouver rose 44% and subsequently declined 14% over 6 years.

From 2001 to 2008 real estate prices in Vancouver rose 116% and subsequently declined ??? TBD ???.

In real inflation adjusted dollars:

From 1979 to 1981 real estate price in Vancouver rose 120% and subsequently declined 51% over 5 years.

From 1985 to 1990 real estate price in Vancouver rose 70% and subsequently declined 15% over 9 months.

From 1991 to 1994 real estate price in Vancouver rose 35% and subsequently declined 23% over 5 years.

From 2001 to 2008 real estate prices in Vancouver rose 87% and subsequently declined ??? TBD ???.

In Summation

All I can really say about the past price movements in the Vancouver market is that after every price runup there has been a price decline. Well duh!! Personally I would rather focus on the following criteria, which is the ratio of rent payments to mortgage payments.


As I have mentioned before, my formula for determining a purchase price for a property that I'd like is this:

{Fair Price} = [1/{Five Year Fixed Mortgage Rate}] * [{Annual Rent} - {Property Taxes + Maintenance}]

For example:A townhouse rents for $1500 per month has maintenance of $150 per month and property taxes of $150 per month. The five year fixed mortgage rate is approximately 5.9% right now.

{Fair Price} = [1/0.059] * [{1500 * 12} - {150 * 12 + 150 * 12}]
{Fair Price} = [17] * [18000 - 3600]
{Fair Price} = $244,800

Where I am looking to purchase this means that I am looking for a price decline of approximately 30%. Rents could increase as well but I see this as being unlikely since I haven't heard of too many people getting huge raises recently to be able to afford sizeable rent increases.