Condo prices stay hot in Vancouver’s split market

REAL ESTATE Detached home sales slow as foreign tax bites

Vancouver detached properties continue to see limited price increases one year after the British Columbia government brought in a 15- per- cent tax on foreign buyers.

Statistics from the Real Estate Board of Greater Vancouver released Tuesday show the benchmark price for a detached home reached $ 1,617,300 in September, a 2.9- per- cent increase from a year ago, but only a 0.1- per- cent increase from August. By comparison, the benchmark price for an apartment property was $ 635,800, a 21.7- per- increase from a year ago and a 1.4- per- cent increase from just August.

“It’s a split market and has been unfolding over the last year almost since the foreign tax went into effect,” said Doug Porter, chief economist with Bank Of Montreal. “Our view is that in some respects the condo market is the real market in Vancouver and the detached market is driven by foreign investors and seen the biggest reversal. The condo market is driven by real underlying events like employment and population growth.”

The board said there were 2,821 units sold in the region in September, 2017, a 25.2-per-cent increase from a year ago but a 7.3-per-cent decrease from the 3,043 homes sold in August. Sales from last month were 13.1-per-cent above the 10-year average for September.

“Our detached homes market is balanced today, while apartment and townhome sales remain in sellers’ market territory,” said Jill Oudil, president of the board.

Overall, 5,375 new homes were listed for sale on the Multiple Listing Service i n Metro Vancouver l ast month, a 12- per- cent i ncrease from a year ago and a 26.6- per- cent increase from August.

The t otal number of homes listed in Metro Vancouver last month was 9,466, a 1.2- per- cent increase from a year ago but a 7.5- per- cent jump from just last month.

“Detached homes made up 30 per cent of all sales in September and represented 62 per cent of all the homes listed for sale on the MLS,” Oudil said. “This dynamic has slowed the pace of upward pressure that we’ve seen on detached home prices in our market over the last few years.”

The sales- to- active listi ngs ratio for September 2017 was 29.8 per cent for all properties but 14.6 per cent for detached homes, 42.3 per cent f or t ownhomes, and 60.4 per cent for apartments.

“Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12- percent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months,” the board noted, in its release.

The index price for all properties was $1,037,300 in September, a 10.9- per- cent increase from a year ago and a 0.7- per- cent increase over the last month.

SLOWED ... UPWARD PRESSURE ON DETACHED HOME PRICES.