Housing sales in the Vancouver region have fallen to their lowest level in six years as price declines extend beyond single-family detached properties to condos and townhouses.
“The affordability situation is improving across all segments of the market,” said Josh Gordon, assistant professor at Simon Fraser University’s school of public policy.
While the Vancouver region remains by far the most expensive housing market in Canada, prices for condos and townhomes have slid over the past four months after a five-year rally. By contrast, prices for detached houses started their descent in mid-2016, before recovering in early 2017 and then heading down again in October, 2017.
Factors influencing the market include the B.C. government’s plan, unveiled in February, for what it calls a speculation and vacancy tax targeted primarily at out-of-province residents. “That tax announcement has curtailed speculative buying, as we see in the lower sales totals. Flipping activity has dropped off,” Prof. Gordon said in an interview on Friday.
Phil Moore, president of the Real Estate Board of Greater Vancouver, said the number of listings has increased to a four-year high. With 12,984 properties for sale on the Multiple Listing Service, that’s up 42.1 per cent from a year earlier.
“For home buyers, this means you have more selection to choose from,” Mr. Moore said in a statement. “For sellers, it means your home may face more competition, from other listings, in the marketplace.”
Sales volume for all housing types in October decreased to 1,966 transactions, down 34.9 per cent from 3,022 sales in the same month of 2017. Last month’s sales, the lowest for October since 2012, were 26.8 per cent under the 10-year average for the month, according to the board.
Year-over-year residential sales have sunk for nine consecutive months.
In Greater Vancouver, the month-over-month benchmark price (an industry representation of the typical home sold in an area) for all residential types has declined for five consecutive months, hitting $1,062,100 in October. The region’s benchmark price has fallen since reaching a record $1,094,000 in May.
The provincial government under the B.C. Liberals implemented a 15-per-cent tax on foreign buyers in the Vancouver region in August, 2016. The B.C. NDP government raised the tax to 20 per cent in February this year and expanded it to other urban areas in British Columbia.
Part of the reason for the slump in detached housing prices is the NDP government’s surtax on B.C. homes assessed at more than $3-million, which will start showing up on property tax bills in 2019.
The government also hiked the property transfer tax on the portion of a home’s sales price above $3-million. “The taxes have dampened that part of the market, especially priced around $3-million to $4-million,” said housing analyst Michael Ferreira of Urban Analytics.
The gap has narrowed between prices for detached houses and townhouses in the region over the past year. The market for detached houses declined to an average price last month of $1,630,323, down 9.6 per cent from a year earlier, while prices in the townhouse segment slipped 1.5 per cent to $879,285.
Federally, Canada’s banking regulator implemented a policy on Jan. 1 that makes it tougher for buyers to qualify for mortgages.