Photo: Ruth Hartnup/Flickr
The third quarter of 2016 brought an aggregate year-on-year home price surge of 30.6 per cent in Greater Vancouver, but according to Royal LePage, the coming months could bring some price relief.
“In what may be a final hurrah for this expansionary cycle, Greater Vancouver posted another quarter of unsustainably high price appreciation,” President and CEO Phil Soper said in a release accompanying the company’s latest House Price Survey. “For months, the number of homes trading hands has been slowing on eroding affordability. And, slower sales volumes lead to moderating prices.”
Home sales have indeed been slowing in the Greater Vancouver area, largely due to the foreign-buyer tax put in place on August 2nd. Last month, sales in the region fell 9.5 per cent month-on-month and 32.6 per cent year-on-year, similar to declines seen in July and August. September sales were also below the 10-year average for the month for the first time since May 2014.
Lower prices have been slow to follow home sales declines because Greater Vancouver inventory levels remain “severely low” while demand is incredibly high. Royal LePage’s prediction that prices could soon start falling is based in large part on the idea that interest from potential buyers is set to fall.
“We could very well be headed for a more balanced market with both foreign and domestic interest beginning to normalize due to steep home price appreciation, general uncertainty, high taxation and tightened mortgage regulations,” said Randy Ryalls, general manager of Royal LePage Sterling Realty, in another release.
For now, however, Greater Vancouver home prices remain high. The aggregate home price for the entire area in the third quarter was $1,194,653. That breaks down to median two-storey and bungalow prices of $1,578,601 and $1,288,520, respectively, and a median condo price of $528,388. Regionally, West Vancouver, Vancouver and Richmond had the highest home prices.