February sales for various housing types in the Vancouver area have tumbled to a 10-year low, with the market for detached houses getting hit the hardest.
The price for detached properties sold in the region averaged $1,442,863 last month, down 16.9 per cent from February, 2018, the Real Estate Board of Greater Vancouver said on Monday.
Total residential sales last month declined to 1,484 transactions, down 32.8 per cent when compared with a year earlier.
“Conditions have shifted over the last 12 months to favour buyers, particularly in the detached home market,” Greater Vancouver board president Phil Moore said in a statement.
Last month’s regional sales for various housing types were the lowest for February since 2009, when 1,480 properties changed hands in the month during the recession.
Industry experts say provincial and federal factors have combined to cool off what had been a runaway market, in which prices skyrocketed from mid-2013 to mid-2016. In August, 2016, the BC Liberal government introduced a foreign-buyers tax of 15 per cent in the Vancouver region.
In February, the average number of days on the market for detached houses in Greater Vancouver rose to 55 days, compared with 44 days in the same month of 2018.
The BC NDP government raised the foreign-buyers tax to 20 per cent from 15 per cent in February, 2018, 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, and other B.C. taxes aimed at higher-end properties.
Mortgage rates have steadily risen since mid-2017 and the federal banking regulator implemented a stress test on Jan. 1, 2018, making it tougher to qualify for mortgages.
While price declines have been steepest in the City of Vancouver, the affordability crisis lingers as condo prices remain out of reach for thousands of prospective first-time buyers. The benchmark price for condos sold last month dipped to $660,300 in Greater Vancouver, down 4 per cent from a year earlier.
In Vancouver’s sliding housing market, some industry observers add a quirky factor, arguing that the once-vaunted power of the number eight has lost its lustre.
Eight is deemed lucky in Chinese culture, notably for recent arrivals from China, and the number has been a frequent sight in Vancouver real estate for list prices. But Chinese buyers are backing away, and the number eight is becoming less common.
At 6414 Chester St. on Vancouver’s less-expensive east side, the seller listed for $1,388,000 in September, and it took five months to find a buyer for the detached teardown. The owner, the Parish of Bishop Hill’s Memorial Church of St. Mary the Virgin, accepted an offer of exactly $1-million last month for the listing touted as having the “potential to build your dream home.”
At 4555 Magnolia St., on the city’s pricey west side, a couple listed their home for $3,680,000 in November and sold for $3,050,000 in February – taking 76 days to sell.
Andy Yan, director of Simon Fraser University’s city program, said the number eight ascended to folklore status during the peak of the housing boom from mid-2013 to mid-2016, when there were more buyers from China. But demand has shifted, with domestic buyers accounting for a higher proportion of total sales.
Foreign buyers, led by an influx from China, accounted for 10 per cent of property sales in the Vancouver region during a stretch of mid-2016, according to a survey by the B.C. government.
“It was an interesting thing three years ago, but buyers now see right through the marketing around the lucky number," said Bryan Yu, deputy chief economist at Central 1 Credit Union.
Still, some buyers still seem attached to it, including the successful bidders for 3589 Granville St. on the city’s west side. Their bid of $8,388,000 sealed the deal in January for the mansion, which was listed for $8,888,000. Eight is deemed a lucky number since its pronunciation sounds like the word for wealth or prosperity.
The benchmark price (an industry representation of the typical home sold in an area) for all residential types in the Vancouver area has declined for nine consecutive months, hitting $1,016,600 last month after setting a record high of $1,094,000 last May.
Over the past year, the benchmark price for detached houses has dropped 9.7 per cent regionally to $1,443,100, and fallen 13.5 per cent on Vancouver’s west side to $3,029,200.