Declining supply blamed in housing sales slide

British Columbia realtors report March sales were off almost 22 per cent from a year ago and blame the shortfall on a lack of new supply hitting the market.

The British Columbia Real Estate Association said Thursday active listings in March dropped 18.1 per cent from a year ago to 25,020, but despite that decline, the average price of a home sold across the province was down 10.5 per cent during the period to $690,597.

“Consumer demand continues to normalize following blockbuster sales in 2016,” said Brendon Ogmundson, an economist with the group that represents 22,000 realtors across the province. “However, the supply of homes available for sale has not recovered and is still declining in many markets around the province.”

Ontario politicians continue to closely watch the British Columbia housing market, in particular Vancouver, as they consider measures to cool the Greater Toronto Area resell market where March prices rose on average 33 per cent from a year ago. British Columbia imposed a 15 per cent additional property tax on foreign buyers last August — a measure many have called for in Toronto.

Those opposed to the tax have talked about the detrimental impact it has had on the Vancouver market. Over the first three months of the year, Vancouver sales are down 37 per cent from the same period a year earlier.

On a provincewide basis, there has been $14 billion in sales activity through the first three months of the year. But that’s down from almost $21.6 billion a year earlier. The dollar volume in the Greater Vancouver market was $7.4 billion over the first quarter, down from $13.3 billion a year ago.

Prices in Greater Vancouver continue to fall and declined 9.3 per cent from a year ago to $991,690.

“Although the average price in B.C. was down yearover-year due to a shift in the composition of sales away from higher-priced homes in Greater Vancouver, home prices in most markets are being pushed higher due to severe supply constraints. This is particularly true for the Victoria region, which has over one month of inventory for sale, as well as for the apartment and townhouse market in the Lower Mainland,” the organization said.

Realtors have suggested foreign buyers in the province have shifted their focus to Victoria and other parts of the province where the additional tax doesn’t apply, a worry Ontario politicians have about a tax in Toronto and how far it would extend beyond the metropolitan area.

The C.D. Howe Institute warned this week that Ontario should not follow B.C.’s lead and pointed out a tax that reduces home values will penalize people who have already purchased property.

It says its research shows the tax has led to nearly 40 per cent fewer transactions than would have occurred without it and average prices that are 4.5 per cent lower.