Photo: Wendy Cutler/Flickr
Following the announcement of new BC housing policies in February, home price appreciation has been decelerating in Greater Vancouver, which one economist says could be a sign that price growth in the overheated market are on a path to cool further.
In the past two months, the annual rate of benchmark price increases has slowed in Greater Vancouver, writes RBC Senior Economist Robert Hogue in a note published last week.
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In April, the benchmark price for all property types in Greater Vancouver hit $1,092,000, a 14.3 per cent increase from a year ago, according to the latest data from the Real Estate Board of Greater Vancouver (REBGV). This annual price growth is almost two percentage points less than what was seen in March 2018, when the benchmark price was $1,084,000, up 16 per cent from a year ago.
“We’re probably in an episode where a change in regulation is going to exert an effect on the market, cooling it down for a period of time,” Hogue tells BuzzBuzzNews.
The economist notes that April 2018 was the first time that the annual benchmark home price growth rate eased back below 15 per cent since November 2017 — a possible sign that “the market might be changing course away from overheating.”
“It could be another episode of a bit of a cooldown period after a new policy change, like we’ve seen the month following August 2016 when the government implemented a 15 per cent tax on foreign buyers,” says Hogue.
“We saw a number of months when activity slowed down, so we could see something similar this time,” he adds.
However, Hogue is quick to note that although home price growth is decelerating, it’s done little to change the region’s housing affordability crisis.
“What we’ve seen is a slowdown in the growth and as long as there’s growth there’s deterioration in housing affordability,” says the economist.
Going forward, Hogue says the new BC housing measures will likely allow prices to continue decelerating over the coming months.