As detached home sales continue to see sharp drops in the City of Vancouver, prices are beginning to experience declines as well. And one Vancouver-based realtor expects prices will keep falling in the coming months.
In a recent blog post, local realtor Steve Saretsky wrote about the City’s record-low 173 detached home sales recorded in April, a 31 per cent year-over-year drop.
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It was the lowest detached home sales total for the month of April on record.
Meantime, detached home prices also dropped in the city last month to $2,397,464, a five per cent decline from a year ago, according to the latest data from the Real Estate Board of Greater Vancouver (REBGV).
“Anytime you have really weak sales combined with rising inventory, that tends to lead to price reductions and that’s really what we’re seeing right now,” Saretsky tells BuzzBuzzNews.
Saretsky attributes the drop in detached sales to a combination of factors, including the stress test implemented on January 1, along with rising interest rates and new BC housing policies announced in February.
The comprehensive provincial housing plan includes an increase to the existing foreign buyer tax to 20 percent, along with a new speculation tax slated to start this fall.
Saretsky also argues that diminishing foreign capital in Vancouver is another contributor to declining detached sales and prices.
“I think when you add those [factors] that are still coming down the road, I don’t see how that’s going to be bullish for detached house prices. I think we’re going to continue to see more downward pressure in that space,” says Saretsky.
With the speculation tax looming on the horizon, Saretsky adds that more sellers will likely list their detached homes, and in turn, weak sales will persist and prices will continue to dip in the near-term.
“There’s an imbalance which is going to lead to buyers having a lot of choices and wanting lower prices. Buyers are really in the upper hand and that’s going to lead to more price reductions,” he says.