The Vancouver region’s high-flying market for luxury real estate is faltering, but will likely avoid a pratfall this year, says a firm that specializes in multimillion-dollar homes.
The hectic activity for houses that sell for $3-million or higher has calmed down in Metro Vancouver, with the number of high-end properties that changed hands decreasing 36 per cent last year, said Dan Scarrow, vice-president of corporate strategy at Macdonald Realty Group.
“We’ve moved back into a normal market,” Mr. Scarrow said in an interview Wednesday. He said the premium property market has cooled after being hot from 2010 until the spring of 2012.
The most expensive home sold in the Vancouver area last year went for $19.8-million, followed by $16.2-million and $14.2-million transactions.
All told, there were 439 transactions for houses that fetched $3-million or more in 2012, down from 691 deals in 2011, according to Macdonald Realty’s analysis.
Vancouver’s west side remained the focal point for luxury buyers, though sales in West Vancouver, South Surrey and White Rock also contributed to the latest totals. Most of the premium deals were for single-family detached homes. Forty-four of the high-end sales last year were condos or townhouses.
Despite the slowdown, last year still proved to be busier than 2010, when 375 top-tier properties fetched at least $3-million.
Mr. Scarrow estimated that selling prices for Metro Vancouver’s luxury residences have declined 10 per cent on average since peaking last spring – a harder fall than what the broader local market experienced.
The Real Estate Board of Greater Vancouver’s December home index price, which strips out the most expensive properties, was $590,800 for single-detached homes, condos and townhouses – a drop of 2.3 per cent from the same month in 2011. December benchmark prices rose 0.5 per cent year-over-year to $420,600 in the Fraser Valley.
Mr. Scarrow said 2012 ranks as the second-best year for top-tier sales in the annual data that dates back to 2000, when there were only 10 transactions valued at $3-million or higher.
Investor immigrants helped spark a flurry of activity on the multiple listing service from 2010 to the spring of 2012, Mr. Scarrow said, noting that buyers now tend to concentrate on obtaining a principal residence only instead of targeting several properties.
Whether it’s a starter home or fancy mansion, prospective buyers have been taking their time shopping so far in 2013, while sellers are holding out for a bid reasonably close to asking prices that in some cases already have been reduced from the original listing, he said.
There were 107 houses that sold for $5-million or higher last year in the Vancouver region, or a 25-per-cent drop from 142 sales in 2011.
Last year, there were also eight luxury transactions worth at least $3-million on Vancouver Island, led by a $5.7-million sale, and four elite-home deals in the Okanagan, topped by a $5-million sale, said Macdonald Realty.