The housing market in Vancouver has been taking a huge blow lately. The Metro Vancouver housing market has seen a negative impact across all housing types with sales going down a significant 24% over the summers, according to a report by Sotheby’s International Realty Canada.
Sales going downhill is translating into lower prices. Sotheby’s CEO Brad Henderson holds the provincial speculation tax accountable for the recent developments in Vancouver’s real estate market.
“I think ‘fear of missing out’ has translated into the fear of paying too much if you’re a buyer and the fear of selling too low if you’re a seller,” said Henderson.
Vancouver properties valued over $1 million saw a 24% drop in the months of July and August compared to the same months of last year, with only 434 houses being sold. In the same period, houses valued over $4 million experienced a 33% drop in sales with only 31 units being sold. In the condominium segment of Vancouver houses for sale, 162 sales over $1 million were completed in the months of July and August, a 21 percent drop compared to the same months last year. In the area of Metro Vancouver north of Fraser River, only 1929 units were sold in August, a more than 33% fall compared to the 3043 units sold the same month last year.
The Metro Vancouver Housing market observed a similar decrease in housing prices over all types of real estate, be it detached homes or townhouses or condominiums. The average value of a detached home experienced a 10.3% in August compared to the same month last year whereas the typical west side condominium’s price suffered a 2.4% drop in the last 3 months.
“Home buyers have been less active in recent months and we’re beginning to see prices edge down for all housing types as a result,” Phil Moore, president of the real estate board said in a news release.
Looking at the rest of the Canadian housing market the situation is somewhat smoother, with Montreal and Toronto’s market has seen a rise in sales of properties valued over $1 million in July and August. The Calgary market has been depressed as of late due to tighter federal mortgage rules, but still reported an increase in sales of over $1 million. The contrasting retreat from Metro Vancouver’s housing market in the British Columbia (B.C.) province right now, according to Henderson, is due to the foreign-buyers tax introduced in 2016 and the new provincial speculation tax. Regarding the foreign-buyers tax, Henderson had this to say: “It is fair to say some foreign buyers have withdrawn from the Vancouver market.”
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