Photo: Wendy Cutler/Flickr
Vancouver home sales over $1 million have dropped in the first half of 2017 compared to a year ago, however a new report by Sotheby’s International Realty Canada suggests that the city’s luxury property sales are falling in line with long-term averages.
In Vancouver, a total of 2,385 residential properties over $1 million sold in the city from January 1st to June 30th, 2017, a 23 per cent drop compared to the same period in 2016, according to the top-tier real estate company’s mid-year report.
“It is neither shocking nor problematic that the volume of activity in Vancouver this year is down when compared to last year,” Brad Henderson, President and CEO of Sotheby’s International Realty Canada tells BuzzBuzzNews.
“It’s still very healthy and there’s still upward pressure on prices,” he adds.
The bi-annual publication outlines market activity within the nation’s major metropolitan top-tier real estate markets during the first half of the year. The report includes sales of condominiums, attached and single-family detached homes priced at $1 million-plus and $4 million-plus.
Luxury sales in the City of Vancouver experienced a slowdown when a 15 per cent foreign-buyer tax was introduced in August 2016, in an effort to ease the formerly scorching market.
But as uncertainty surrounding the tax in the broader market appeared to alleviate at the beginning of the year, sales activity in the $1 million-plus market normalized in the first half of 2017 after experiencing historic highs in 2016.
In the $4 million-plus market, overall luxury sales saw a 52 per cent year-over-year drop to 211 units.
Out of all property types, Vancouver’s top-tier condo market saw a modest increase in sales activity with 648 $1 million-plus units sold in the first half of 2017, a 5 per cent increase compared to the same period in 2016.
Among all of the nation’s $4 million-plus home sales in the first six months of 2017, Vancouver detached home sales in this price range saw the steepest year-over-year drop, falling 53 per cent to 191 detached properties compared to 2016.
Meantime in Calgary, which Sotheby’s also covered in its report, both conventional and top-tier real estate activity have been showing signs of recovery in 2017 so far.
In the first six months of 2017, $1 million-plus home sales in Calgary rose 24 per cent to 395 units sold compared to a year ago.
Of those transactions, roughly 90 per cent were comprised of detached homes, which saw a 22 per cent year-over-year increase to 351 homes sold compared to a year ago.
“This is a continuation of a trend that we’ve been seeing over the last 12 to 18 months and that gradually activity is coming back into the market,” Henderson tells BuzzBuzzNews.
Leading the nation with the most luxury home sales was the Greater Toronto Area (GTA), which includes Durham, Halton, Peel, the City of Toronto and York.
The region took the top spot for a third straight year, despite the provincial government’s introduction of the Ontario Fair Housing Plan in April 2017 as an effort to cool the GTA’s red-hot market
From January 1st to June 30th, 2017, a total of 14,292 properties over $1 million sold in the GTA, a 41 per cent year-over-year increase compared to a year ago.
Meanwhile, luxury home sales over $4 million saw a 93 per cent gain to 258 units sold compared to the same period in 2016 — the greatest year-over-year percentage gain seen in the GTA.
However, since the new policy was implemented in Ontario, luxury sales in the GTA have dropped compared to a year ago.
“The story that it doesn’t tell [is] in May and June we actually saw the activity — the number of homes being sold — actually decrease when compared to the same months in 2016,” says Henderson.
Besides luxury sales possibly being impacted by the Fair Housing Plan, Henderson says other reasons for the slowdown include uncertainty surrounding high prices in Toronto, an abundance of inventory and buyers deciding to sell.
Like the rebound Vancouver is experiencing in its luxury market, Henderson says the GTA may see the same result.
“We believe that the underlying fundamentals are still strong and that the market is taking a pause to reflect on what is a lot of data to come at them all at once,” says Henderson.