It’s been a race to the bottom for Vancouver’s luxury housing market.

The city placed 99th out of 100 on consultancy Knight Frank’s Prime International Residential Index, which compares prices at the high end of markets, generally the top 5 percent by value.

According to the index, luxury home prices in Vancouver were down 11.5 percent year-over-year as of December 2018.

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That’s quite the fall from where the market stood in 2015, when it placed first for jaw-dropping annual price growth of 24.5 percent. Since then, the market has slid down the rankings, and in 2017 it took the 37th spot with prices up a muted 3.5 percent.

“Vancouver, arguably recipient of the most stringent regulations in 2018 — including higher taxes for non-residents, a speculation tax, a school tax and a vacancy tax — is also still absorbing the impact of China’s tightening of capital controls, which up until late 2016 had been an influential source of demand,” writes Kate Everett-Allen, head international residential research for Knight Frank.

Only Lagos, Nigeria’s largest city, surpassed Vancouver’s decline with prime residential prices collapsing 25 percent.

While Vancouver was one of only four markets to see prices plummet by 10 percent or more, Knight Frank notes that globally property markets are performing weaker overall. In 2017, eleven markets experienced double-digit price gains, compared to five in 2018.

“This decline comes as little surprise. As we learn to live without the ultra-low interest rates that have supercharged real estate markets globally since 2008, lower price growth is an inevitable consequence of the shift in monetary policy,” Everett-Allen says.

“Yet despite the slowdown, almost three-quarters of the locations in the PIRI 100 registered rising or static growth in 2018 compared with 65 in 2017.”

The top-performing market was Manila, the Philippines capital where luxury home prices were up 11 percent. It was the first time in the index’s 12-year history that the leading market did not show price gains of 21 percent or more.

Knight Frank chalks Manila’s performance up to its booming economy.

“This is driven by a lack of supply and the Philippines’ thriving economy — annual GDP growth exceeded 6% in 2018 — which motivated some expatriates to grab a slice of real estate back home,” Everett-Allen adds.

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