Careful What You Wish For........ The Economic Fallout of Housing Price Shocks


The desire of some well-meaning British Columbians for government to drive down the price of homes through demand-side policy may sound practical at first blush. However, when you consider the broad and deep economic toll that a negative shock to home prices would exact on both homeowners and renters, it quickly becomes apparent that such an approach is at best, a mug’s game. BCREA Economics analysis* shows that even a relatively modest negative price shock will produce significant consequences to the BC economy. 

 

http://bcrea.bc.ca/docs/economics-forecasts-and-presentations/the-economic-fallout-of-housing-price-shocks.pdf?sfvrsn=2

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