The report says that beyond cooling the market, data showing a slowdown in sales in the city suggest that, if unemployment was to rise, there could be a house price decline.
With Fitch calling for a 20 per cent overvaluation in the market, the decline in prices could be sizeable.
The scenario involves slowing sales - CREA has already reported a 21.5 per cent drop in Vancouver sales since February – and rising unemployment. That second factor is not an issue currently as Vancouver has seen strong growth in job creation, although other metros have seen a slower pace.
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Three weeks after the 15 per cent tax on foreign home buyers was introduced in Vancouver, Fitch Ratings says it leaves the housing market vulnerable to rising unemployment.