POP! goes the bubble. That may be one reaction that comes out of the news that Vancouver's housing prices dropped sharply in August 2012 compared to the previous year.

The B.C. Real Estate Association reports that the dollar value of homes sold through the Multiple Listing Service (MLS) dropped 25 per cent to $2.6 billion last month, while total residential unit sales declined 17.9 per cent.

The average MLS residential price was $491,145 — nine per cent lower than a year earlier.

"Tighter mortgage credit conditions introduced in July appear to be taking a toll on an already tentative market," Cameron Muir, the BCREA's chief economist, said in a news release.

"However, with home sales slower than improving economic conditions suggest, a rebound may be in store before year-end."

New mortgage regulations that lower the limit of mortgage periods for government-insured homes from 30 years to 25 years aren't just having an impact in British Columbia.

The Canadian Real Estate Association reports that the regulations have dragged down Canadian home sales in five of the last six months.

"While we always caution that housing market trends at the national level can and do run counter to trends in many local markets, the decline in activity in August was definitely the result of much of the country moving in the same direction," said Wayne Moen, president of the Canadian Real Estate Association.

Canadian home sales in August dropped 8.9 per cent from the same period a year earlier and they fell 5.8 per cent compared with July.

The news comes as a high-profile U.S. housing guru says he won't invest in Vancouver's real estate market.

In an interview with the Business News Network, Yale University economist Robert Shiller compared Vancouver to San Francisco, which he called a "bubble city that's talked about as one of the major boom and bust cities in the U.S.

"They’re no different in Vancouver, in fact it’s worse in Vancouver.”

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  • Vancouver - $299,999

    #302-2333 ETON ST Building Type : Apartment Bedrooms : 2 Bathrooms : 1 Floor Space : 765 sqft Storeys : 1 Built in : 1988 Title : Condominium/Strata Maintenance Fees : $287.53 Monthly

  • Vancouver - $299,999

    #302-2333 ETON ST

  • Vancouver - $299,999

    #302-2333 ETON ST

  • Vancouver - $199,999

    1640 KENT AV Building Type : House Bedrooms : 1 Bathrooms : 2 Floor Space : 860 sqft Storeys : 2 Built in : 1993

  • Vancouver - $199,999

    1640 KENT AV

  • Vancouver - $199,999

    1640 KENT AV

  • Richmond - $299,900

    #3-8400 COOK RD Building Type : Apartment Bedrooms : 1 Bathrooms : 1 Floor Space : 607 sqft Storeys : 1 Built in : 2010 Title : Condominium/Strata

  • Richmond - $299,900

    #3-8400 COOK RD

  • Surrey - $300,000

    #A4-19296 72A AVE Building Type : Row / Townhouse Bedrooms : 3 Bathrooms : 4 Floor Space : 1298 sqft Storeys : 3 Built in : 2012 Title : Condominium/Strata

  • Surrey - $300,000

    #A4-19296 72A AVE

  • Surrey - $300,000

    #A4-19296 72A AVE

  • Whistler - $299,000

    #6-2720 CHEAKAMUS WY Building Type : Row / Townhouse Bedrooms : 1 Bathrooms : 1 Floor Space : 668 sqft Storeys : 1 Built in : 1998 Title : Condominium/Strata

  • Whistler - $299,000

    #6-2720 CHEAKAMUS WY

  • Whistler - $299,000

    #6-2720 CHEAKAMUS WY

  • Prince George - $299,900

    3049 RIDGEVIEW DR Building Type : House Bedrooms : 4 Bathrooms : 3 Floor Space : 2274 sqft Storeys : 4 Built in : 1977 Land Size : 0.28 ac Title : Freehold

  • Prince George - $299,900

    3049 RIDGEVIEW DR

  • Prince George - $299,900

    3049 RIDGEVIEW DR

  • Kamloops - $299,900

    814-15 HUDSONS BAY TRAIL Building Type : Row / Townhouse Bedrooms : 3 Bathrooms : 3 Floor Space : 1904 sqft Title : Freehold

  • Kamloops - $299,900

    814-15 HUDSONS BAY TRAIL

  • Kamloops - $299,900

    814-15 HUDSONS BAY TRAIL

  • Kelowna - $299,900

    1881 Ambrosi Road # 10 Bedrooms : 2 Bathrooms : 2 Floor Space : 1174 sqft Storeys : 2 Built in : 2012 Land Size : under 1 acre Title : Condominium/Strata Maintenance Fees : $121.74 Monthly

  • Kelowna - $299,900

    1881 Ambrosi Road # 10

  • Kelowna - $299,900

    1881 Ambrosi Road # 10

  • Nelson - $309,000

    304 HIGH ST Building Type : House Bedrooms : 3 Bathrooms : 1 Floor Space : 1148 sqft Storeys : 2 Built in : 9999 Land Size : 0.163 ac

  • Nelson - $309,000

    304 HIGH ST

  • Nelson - $309,000

    304 HIGH ST

  • Cranbrook - $299,900

    203 S 8TH ST Building Type : House Bedrooms : 4 Bathrooms : 3 Floor Space : 2170 sqft Storeys : 1 Built in : 1994

  • Cranbrook - $299,900

    203 S 8TH ST

  • Cranbrook - $299,900

    203 S 8TH ST

  • Abbotsford - $302,900

    #11-31255 UPPER MACLURE RD Building Type : Row / Townhouse Bedrooms : 3 Bathrooms : 2 Floor Space : 1186 sqft Storeys : 2 Built in : 1992

  • Abbotsford - $302,900

    #11-31255 UPPER MACLURE RD

  • Abbotsford - $302,900

    #11-31255 UPPER MACLURE RD

  • Prince Rupert - $299,000

    1541 OVERLOOK ST Building Type : House Bedrooms : 5 Bathrooms : 3 Floor Space : 2300 sqft Storeys : 3 Built in : 1968 Land Size : 0.229 ac

  • Prince Rupert - $299,000

    1541 OVERLOOK ST

  • Prince Rupert - $299,000

    1541 OVERLOOK ST

  • Smithers - $309,500

    4314 JACKPINE RD Building Type : House Bedrooms : 5 Bathrooms : 2 Floor Space : 2434 sqft Storeys : 4 Built in : 1996 Land Size : 5 ac

  • Smithers - $309,500

    4314 JACKPINE RD

  • Smithers - $309,500

    4314 JACKPINE RD

  • Kitimat - $299,000

    96 ANDERSON ST Building Type : House Bedrooms : 4 Bathrooms : 3 Floor Space : 2300 sqft Storeys : 2 Built in : 1974 Land Size : 0.186 ac

  • Kitimat - $299,000

    96 ANDERSON ST

  • Kitimat - $299,000

    96 ANDERSON ST

  • Victoria - $299,900

    304-751 Goldstream Ave Building Type : Apartment Bedrooms : 2 Bathrooms : 2 Floor Space : 1030 sqft Built in : 2010 Land Size : 1113 sqft View : City view Title : Condominium/Strata

  • Victoria - $299,900

    304-751 Goldstream Ave

  • Victoria - $299,900

    304-751 Goldstream Ave

  • Nanaimo - $299,900

    1691 NAIRNE ROAD Building Type : House Bedrooms : 4 Bathrooms : 2 Floor Space : 1870 sqft Built in : 1967 Land Size : irregular Title : Freehold

  • Nanaimo - $299,900

    1691 NAIRNE ROAD

  • Nanaimo - $299,900

    1691 NAIRNE ROAD

  • Cortes Island - $279,000

    1411 ROBERTSON ROAD Building Type : House Bedrooms : 2 Bathrooms : 1 Floor Space : 1116 sqft Built in : 1975 Land Size : 2.71 ac Title : Freehold

  • Cortes Island - $279,000

    1411 ROBERTSON ROAD

  • Cortes Island - $279,000

    1411 ROBERTSON ROAD

  • Dawson Creek - $279,000

    1552 109 AVE Building Type : House Bedrooms : 4 Bathrooms : 2 Floor Space : 1100 sqft Storeys : 1.5 Built in : 1962 Land Size : 73 X 130 Title : Freehold



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  • 10: New York City - 6.2

    The number shown is the housing affordability ratio -- a measure that shows how much a median home costs relative to median incomes in a given city. Historically, a typical ratio has been around three. Source: Demographia, <a href="http://www.demographia.com/dhi.pdf" target="_hplink"><em>8th Annual International Housing Affordability Survey</em></a>

  • 9: Auckland, New Zealand - 6.4

    Source: Demographia, <a href="http://www.demographia.com/dhi.pdf" target="_hplink"><em>8th Annual International Housing Affordability Survey</em></a>

  • Adelaide, Australia - 6.7

    Source: Demographia, <a href="http://www.demographia.com/dhi.pdf" target="_hplink"><em>8th Annual International Housing Affordability Survey</em></a>

  • San Francisco - 6.7

    Source: Demographia, <a href="http://www.demographia.com/dhi.pdf" target="_hplink"><em>8th Annual International Housing Affordability Survey</em></a>

  • London - 6.9

    Source: Demographia, <a href="http://www.demographia.com/dhi.pdf" target="_hplink"><em>8th Annual International Housing Affordability Survey</em></a>

  • San Jose, California - 6.9

    Source: Demographia, <a href="http://www.demographia.com/dhi.pdf" target="_hplink"><em>8th Annual International Housing Affordability Survey</em></a>

  • Melbourne, Australia - 8.4

    Source: Demographia, <a href="http://www.demographia.com/dhi.pdf" target="_hplink"><em>8th Annual International Housing Affordability Survey</em></a>

  • Sydney - 9.2

    Source: Demographia, <a href="http://www.demographia.com/dhi.pdf" target="_hplink"><em>8th Annual International Housing Affordability Survey</em></a>

  • Vancouver - 10.6

    Source: Demographia, <a href="http://www.demographia.com/dhi.pdf" target="_hplink"><em>8th Annual International Housing Affordability Survey</em></a>

  • Hong Kong - 12.6

    Source: Demographia, <a href="http://www.demographia.com/dhi.pdf" target="_hplink"><em>8th Annual International Housing Affordability Survey</em></a>