Single-family home sales in Metro Vancouver are off to a slow start this year, and with the recent implementation of the BC government’s new housing policies, activity might not pick up anytime soon.
“Right now what we’re seeing is a confusion and so the sellers are not selling. They’re just holding on, taking a wait and see approach,” Real Estate Board of Greater Vancouver (REBGV) president Phil Moore tells BuzzBuzzNews.
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Detached sales in the City of Vancouver hit a 27-year low in March with a total of 136 units changing hands, down 44 per cent from a year ago.
Many economists and market experts are attributing the slowdown in sales to a combination of stricter mortgage regulations, rising interest rates and BC’s new housing plan, announced in February.
The comprehensive plan, which addresses BC’s housing affordability crisis, includes a five per cent increase to the existing foreign buyer tax, along with a new speculation tax.
Last month, there were a total of 722 detached sales in Metro Vancouver, down 37 per cent from 1,150 homes sold a year ago.
As we enter the busiest real estate season of the year, here are 8 more facts that show softened activity in Metro Vancouver’s detached segment.
1. A total of 352 detached homes sold in the City of Vancouver from January to March — registering a 27-year low for the first quarter of 2018 and surpassing the previous low set in Q1 2009.
2. Vancouver realtor Steve Saretsky says detached luxury sales in the city are being impacted by a global pullback of overseas homebuying. “Luxury markets across the globe have cooled significantly following China’s capital controls,” writes Saretsky, in a recent blog post.
3. Although detached sales are down in Metro Vancouver, home prices are on the rise. In March, the benchmark price of a detached home in the region was $1,608,500, up 7.4 per cent from March 2017 and a 0.4 per cent increase compared to February 2018.
4. However, compared to the region’s condo and townhome segments, prices are not escalating as much on a year-over-year basis. “Demand and pricing remain much softer in the single-family home market [but] out of reach for most first-time buyers and many move-up buyers,” reads a Scotiabank Economics report.
5. In Metro Vancouver, the average amount of days detached homes were on the market remained unchanged in March at 40 days compared to 39 days a year ago.
6. There were a total of 1,800 detached listings in Metro Vancouver in March compared to 1,924 listings a year ago. “Last month was the quietest March for new home listings since 2009 and the total inventory, particularly in the condo and townhome segments, of homes for sale remains well below historical norms,” says REBGV’s Moore, in a press release.
7. In March, the sales-to-active listings ratio for detached homes was 14.2 per cent. REBGV says downward pressure on home prices occurs when the ratio falls below the 12 per cent mark over several months, while home prices experience upward pressure when it surpasses 20 per cent for a prolonged period of time.
8. According to Moore, Metro Vancouver’s detached market is shifting into buyers’ market territory. “It comes down to almost a tale of two markets. The markets for townhomes and condos being very strong and the market for detached homes starting to soften,” he says.