Vancouver home sales decline
House sales in the Vancouver, British Columbia, area declined 26 percent in August from the same period last year, but observers said it’s too early to tell if the introduction of a 15 per cent tax on foreign buyers was a major factor.
The Real Estate Board of Greater Vancouver said on Sept 2 that existing home sales in the Vancouver area in August fell to 2,489 from 3,362 in August 2015. On Aug 2 British Columbia instituted the 15 percent tax on foreign property buyers in metropolitan Vancouver.
“It’s hard to attribute how much of the slowdown was due to the tax. It was certainly a contributing factor, but mostly we had a typical seasonal summer slowdown,” said Wayne Ryan, managing broker at Re/Max Crest Realty in Vancouver in an email.
“Sales have been trending downward for a few months and the truth is we don’t know if the tax was a big factor. It will take some more time before we can really understand the impact of the new tax,” Dan Morrison, president of the Real Estate Board of Greater Vancouver said in an interview.
Despite the slump, August sales were only off 3.5 per cent from the 10-year average for the month. “Remember we are also comparing this August sales to those from a year ago, which were the highest sales we have ever had for August,” added Morrison.
Vancouver has become the most expensive city in Canada for housing as the average sales price of a home more than doubled between 2005 and 2015, to 1.6 million Canadian dollars ($1.22 million), according to the Real Estate Board of Greater Vancouver. The city has also attracted a large number of Chinese buyers.
The new tax applies to just the Vancouver metropolitan area, not the entire province of British Columbia. “Victoria which is a two-hour ferry ride way from Vancouver had record sales in August. But we don’t really know if that was because of the tax,” Morrison said.
“If people really want to come to Vancouver, they will come here,” said Morrison. “If they are looking only for an investment, then they will weigh their options.”
Ryan has a positive sales outlook for the rest of the year. “Our current supply of properties for sale is in line with what we normally see in September. Providing we don’t see a surge of listings coming to the market, which I’m not anticipating, the tax will have a minimal impact, as sellers will not be inclined to accept lower offers due to the limited selection of listings available,” he said.
A home for sale listed at C$7.89 million in the Point Grey neighborhood of Vancouver. The city has long been one of the world’s most expensive places to live and the market remained heated, but a new tax on foreign buyers coincided with a 26 percent drop in sales in August.