Vancouver housing prices on rebound

UP 5% IN QUARTER

Prices in Canada’s most expensive city for existing homes appear to have rebounded from the impact of a tax on foreign buyers as Vancouver realtors reported Tuesday a huge swing in demand for condominiums and townhomes in April.

The Real Estate Board of Greater Vancouver said the composite benchmark price for all residential properties in Metro Vancouver was $941,100 in April, an 11.4-percent increase from a year ago but a five-per-cent jump in the past three months.

Sales of all property types dropped 25.7 per cent from a year ago to 3,533 in April but were 4.8-per-cent above the 10-year average for the month. Compared to March sales, April activity fell 0.7 per cent.

“Our overall market is operating below the recordsetting pace from a year ago and is in line with historical spring levels. It’s a different story in our condominium and townhome markets,” said Jill Oudil, president of the board. “Demand has been increasing for months and supply is not keeping pace. This dynamic is causing prices to increase and making multiple offer scenarios the norm.”

The board said for the first four months of the year, condos and townhomes accounted for 68.5 per cent of all residential sales, up from the 58.2 per cent average over the same period last year.

“Until more entry-level, or missing middle, homes are available for sale in our market, we’ll likely continue to see prices increase,” Oudil said. “There’s been record building this past year, but much of that inventory isn’t ready to hit the market.”

The Vancouver market has seen sales decline steadily since the province announced an additional 15-per-cent tax on foreign buyers effective Aug. 2, 2016. Ontario followed with its own 15 per cent on foreign buyers, calling it a non-resident tax and extending it to the entire Greater Golden Horseshoe which affects a population of about nine million people.

Doug Porter, chief economist with Bank of Montreal, said the evidence is clear that the tax in British Columbia did cool Vancouver’s single detached home market. “Vancouver was as hot as a firecracker in 2016,” said Porter. “It looks the shock of the tax is wearing off. But who knows where prices would have been absent the tax?”

April new listings for detached, attached and apartment properties in Metro Vancouver totalled 4,907, a 19.9-per-cent decrease from a year ago but a three-percent increase from March.

Toronto numbers are due Wednesday, the first reporting period since it brought in its tax, but Porter doesn’t think Canada’s largest city will have the same reaction.

“I would suggest the tax was a shock in B.C.. I don’t think it was shock in Ontario, there was plenty of warning and hints (it was coming),” said Porter.