Vancouver Market Dive - Australia Next?
I don't pay a lot of attention to markets that are WAY outside of my own, by I have been keeping an eye on some of the Canadian markets, because my day-job company does quite a bit of business in Canada (and the markets just interest me in general.)
So I just became aware that the Vancouver market is taking (I'm trying to be sensitive here in case anyone owns there) a pretty significant drop right now.
Vancouver Housing Market Implodes
25% Drop in average home prices in the last 3 months. 20% in the last month. The driving factor behind this seems to be a 15% property tax on Foreign money, which appears as if it was designed to specifically target Chinese money in the market.
And now it looks like Australia is headed the same way:
Australian Home Prices 6 Weeks Away from Collapse
A couple of things:
1. Zero Hedge has a tendency to always predict doom and gloom, but their analysis of recent market behaviors tends to be spot on.
2. I'm not worried about home values in Vancouver and Sydney affecting my little portfolio in Western New York - this topic just interests me and I was curious what everyone else thought.
3. What do you think the affect on US markets will be? If I had to guess, I'd say that this is going to drive prices in the Hot areas for outside money even higher for a while, especially in large Multifamily and Development. But how much higher can the prices in those areas actually go when there's no wage-growth to support them? At what point is it detrimental to the market?
4. I don't think I'm alone in expecting a correction in the US in the next two years - could these foreign markets moving money into the US push that back? Accelerate it?