Photo: Michael Scheltgen/Flickr
In July, home sales fell 26.7 per cent month-over-month and 18.9 per cent year-over-year, and the latest report from the Real Estate Board of Greater Vancouver (REBGV) shows that August brought similar declines. Released September 2nd, the board’s data shows that last month home sales dropped 22.8 per cent from July and 26 per cent from August 2015.
While many expected home sales to sink last month due to Metro Vancouver’s new foreign buyers tax, which came into effect on August 2nd, REBGV President Dan Morrison has emphasized that he believes it is only partially responsible for the declines seen in August.
“Sales have been trending downward in Metro Vancouver for a few months. The new foreign buyer tax appears to have added to this trend by reducing foreign buyer activity and causing some uncertainty amongst local home buyers and sellers,” he said in a press release, adding, “[i]t’ll take some months before we can really understand the impact of the new tax.”
Home prices in Metro Vancouver have not seen the same moderation as home sales these past two months. In fact, the MLS Home Price Index composite benchmark price for all homes in the area is currently sitting at $933,100 — that’s an increase of 31.4 per cent year-over-year and a rise of 4.9 per cent in the last three months.
All home types saw substantial year-over-year benchmark price increases in August, but detached homes recorded the biggest jump at 35.8 per cent; that works out to a benchmark price of $1,577,800. Meanwhile, the benchmark price for an attached home hit $677,600, an increase of 31.1 per cent, and the benchmark price for an apartment was $514,300, a rise of 26.9 per cent.
Explaining why prices remain high even though sales have dropped, the REBGV notes that demand is still outpacing supply in most Metro Vancouver communities. Indeed, overall the region was still very much a seller’s market in August, with a sales-to-active-listings ratio of 29.3 per cent. Home prices begin to experience upward pressure when the ratio is between 20 and 22 per cent.
Heading into the fall, the REBGV will be on the lookout for the BC government’s next round of data on the foreign buyers tax. The board hasn’t offered a prediction on what the tax’s long-term impact may be, but public opinion is currently fairly mixed — while some see it sending overseas investors to other markets, others believe they won’t stay away from Metro Vancouver for long.