The fact that the Home Price Index has obscured the extreme and unusual volatility in average detached home prices may itself be a problem. Few home buyers or sellers are likely aware that it is even occurring. It certainly hasn't been widely reported. Since early 2011, average house prices have changed direction by a factor of 10 per cent or more five times. Such volatility had never happened before, and the swings are getting wilder.
Since Canada's government announced that it was axing the Immigrant Investor Program, there has been plenty of speculation about what that means for the second-most unaffordable property market in the world, where a dumpy bungalow can have almost triple the asking price as a castle on the other side of the country. The average price of a detached home in greater Vancouver? $1,259,775.
While China's policy change has impacted investors' cash flow in the short term, it hasn't curbed their enthusiasm for Vancouver real estate. The sudden rise and fall in real estate prices that we're seeing now in China, as well as fluctuations in the overall economy, mean that people view investing there as no less risky than placing bets on a baccarat table. For many Chinese investors, parking money in Vancouver feels as safe as investing in treasury bills.