Residential property sales in Metro Vancouver fell 26% in August, compared to the same time last year, according to the Real Estate Board of Greater Vancouver.
The latest figures, show 2,489 homes were sold in August 2016 – a massive year-on-year drop compared to August 2015, when 3,362 homes were sold.
The numbers, the first to emerge since the introduction of a new foreign buyers’ property tax rate on August 2, also show homes sales were down from July by 22.8%.
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Under the new rate, foreign buyers of real estate in Metro Vancouver will have to pay an extra 15% property transfer tax at the time of purchase.
According to REBGV, from a historical perspective, August’s sales were 3.5 % below the 10-year sales average for the month, so the market does appear to be levelling off.
Is foreign buyers’ tax helping?
It is not clear whether this is due to the new tax rate, or simply the continuation of a downward trend seen in the market over the last few months.
“It’ll take some months before we can really understand the impact of the new tax,” said Dan Morrison, REBGV president in a release. “We’ll be interested to see the government’s next round of foreign buyer data.”
As you would expect with lower home sales, the total number of properties listed for sale has massively dropped too, continuing an imbalance of supply and demand.
According to REBGV, in August 2016 there were 8,506 homes listed on the MLS in Metro Vancouver, a 21.9% decline compared to August 2015, when 10,897 were listed.
Interestingly, given the huge drop in home sales from July to August this year, there was actually a 1.9% increase in the total number of homes listed month-to-month.
Still a seller’s market
The sales-to-active listings ratio for August 2016 is 29.3%, say REBGV – still a seller’s market; analysts say home prices generally start falling when that ratio drops below 12%.
And prices certainly aren’t falling yet.
The benchmark price – the cost of a typical property – is heading upwards no matter what you’re looking for.
The typical cost of a detached property in Metro Vancouver has now increased 35.8% from August 2015 to $1,577,300 – a 4.2% increase in the last three months.
A townhouse will now typically cost you $677,600, up 31.1% from last August, or 7.1% since May.
Meanwhile, if you want an apartment, get ready to pay $514,300, up 26.9% from August 2015 – a 6.1% increase over the last three months.
The market may be on a downward trend, but it certainly doesn’t feel like it.