Housing sales in 2018 in the Vancouver region slid to an 18-year low as prices for detached homes in some areas dropped at least 10 per cent.
While prices for detached properties in many neighbourhoods on Vancouver’s West Side have declined to levels not seen since early 2016, the affordability crisis is far from over, said Andy Yan, director of Simon Fraser University’s City Program.
“The question is when will the sellers scream uncle,” Mr. Yan said in an interview, noting that prices are still holding steady in some suburbs farthest away from the city of Vancouver. “Those places farther out are by far more closely aligned to local incomes than Vancouver proper."
A study by Mr. Yan showed that 99.7 per cent of detached properties in the city of Vancouver had an assessed value of at least $1-million in mid-2016, but he predicts that detached listings for less than $1-million will no longer be such a rare sight within city limits in 2019.
Sales volume in Greater Vancouver last year fell to 24,619 transactions for detached homes, condos and townhouses, down 31.6 per cent from 2017′s performance, the Real Estate Board of Greater Vancouver reported on Thursday. Last year’s sales were the lowest since 2000, when 21,950 properties changed hands.
Transactions totalled 1,072 last month, tumbling 46.8 per cent compared with December, 2017. The sales slump is forecast to extend well into 2019, with the B.C. government committed to cooling off what had been a red-hot market in mid-2016.
“Buyers and sellers are continuing to be on the sidelines and taking a wait-and-see approach,” said Brad Henderson, president of Sotheby’s International Realty Canada.
“A lot of it has to do with the initiatives put in place by the province. That has more of an impact than other headwinds such as higher interest rates and mortgage stress-testing," he said in an interview.
In February, 2018, the BC NDP government raised the foreign-buyers tax to 20 per cent from 15 per cent, while expanding that tax beyond the initial target of the Vancouver region. Other provincial factors include what the NDP calls a speculation and vacancy tax targeted primarily at out-of-province residents as well as B.C. taxes aimed at higher-end properties.
The benchmark price (an industry representation of the typical home sold in an area) for detached houses sold last month on Vancouver’s West Side decreased to $3,135,400, down 11.8 per cent from a year earlier. By contrast, the benchmark price in the suburb of Pitt Meadows showed a year-over-year gain of 2 per cent to $912,000.
The benchmark price for all residential types in Greater Vancouver has declined for seven consecutive months, hitting $1,032,400 last month after setting a record of $1,094,000 in May, 2018. The condo and townhouse segments had bucked the downward pressure until mid-2018, but have seen prices weaken over the past six months.
The average price for detached houses sold in Greater Vancouver dipped to $1,666,593 last month, down 4.8 per cent from December, 2017, the Greater Vancouver board said.
“As the total supply of homes for sale began to accumulate in the spring, we began to see downward pressure on prices across all home types throughout the latter half of the year,” board president Phil Moore said in a statement.
In the Fraser Valley Real Estate Board’s territory, which includes the sprawling suburb of Surrey, there were 15,586 sales on the Multiple Listing Service last year, down 30.2 per cent from 2017 and marking the lowest annual sales since 2013. The average price for detached houses sold in the Fraser Valley dipped to $1,016,692 last month, down 0.2 per cent compared with December, 2017.