Photo: Wendy Cutler/Flickr
With the introduction of the BC government’s new housing plan, Vancouver’s luxury real estate market is expected to see continued divergence between housing types this spring.
Detached home sales in the city’s top-tier market are forecast to cool off, while activity in the luxury condo and attached markets is slated to climb, according to Sotheby’s International Realty Canada’s 2018 Spring Market Forecast, published today.
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“These [housing] measures are expected to increase consumer hesitation in Vancouver’s top-tier detached home market this spring, but will have a less significant effect on the city’s robust condominium market,” reads the report.
Unveiled last month, the province’s 30-point plan addresses housing affordability — particularly in the Lower Mainland. The comprehensive strategy includes a new speculation tax and a five per cent increase to the existing foreign buyer tax. The plan also expands the boundaries of the tax beyond Metro Vancouver to the Fraser Valley, Victoria, Nanaimo and Kelowna.
The Sotheby’s report tracks real estate activity for homes priced in the $1 million to $4 million-plus range in Canada’s largest cities during the first two months of 2018.
In Vancouver, single-family home sales over $1 million fell 39 per cent in the two month period this year compared to the same period in 2017. Detached home sales between $1 million and $2 million saw an even more pronounced decline during the first two months of the year with 85 units, a 47 per cent year-over-year drop.
Meantime, Sotheby’s says eroding affordability and demographic trends pushed up luxury condo sales during the first two months of 2018. Condo sales over $1 million soared 51 per cent year-over-year from 2017 levels to 232 units sold, while sales over $4 million increased 80 per cent to nine units sold.
The $1 million-plus attached market also saw an annual gain with a total of 85 units, up 18 per cent compared to the same period last year.
According to Sotheby’s, the provincial government’s new housing plan will ease activity in Vancouver’s overall luxury market, despite robust economic performance predicted for 2018.
“In Vancouver, the new housing measures introduced in February cast confusion and uncertainty into the consumer mindset,” says Brad Henderson, President and CEO of Sotheby’s Canada, in a press release.
“While demographic trends and housing needs will support the top-tier condominium market, disruption in the overall real estate market is inevitable,” he adds.
Overall, $1 million-plus sales for all property types (condos, attached and single-family homes) fell 6 per cent during the first two months of the year to a total of 510 properties. Meantime, $4 million-plus sales dropped 20 per cent year-over-year.