In July, Vancouver area’s home sales dropped to normal levels. The Real Estate Board of Greater Vancouver is waiting to watch what will happen next in Metro Vancouver’s real estate industry.
According to the statistics, in July 2016, residential property sales were 3,226, down 18.9% from one year earlier, which recorded 3,978 homes sales. In this case, housing sales were down by 26.5% from June 2016, when 4.400 houses were sold. Since January, this is the first month in which home sales have counted below 4,000.
Sales of single-family homes saw the biggest decline at 1,077, down 30.9% from the year before. Real estate sales have declined over 31% compared with June’s 1562 single family home sales.
Inventory Up but Shortage of Active Listings Persists
The slowdown in sales has not really affected the increasing prices in Vancouver’s real estate market. The standard price of a typical home (all property types) stands at $930,400, a 32.6% rise over the past year in the same month.
The average price for a single-family house was $1.57 million, up 38% compared with July 2015. This is the highest price rise of the three home types. The most expensive area of Vancouver West saw detached homes selling for a $3.37 million.
Townhome prices were up to a price of $669,000, a 29.4% jump year-over-year and 1.8% from the year before. Next, condo-apartment prices increased again, up 27.4% from July 2015 to $510,600, and 1.9% over June’s price, which was $501,100.
Foreign buyer tax has a significant effect on home sales
After the foreign buyer tax had been announced on July 25, 2016, the number of home sales in Vancouver cooled down.
In the last week of July, there were only 3 detached home sales in Richmond, compared to 12 in the second last week and 25 in the third last week. In Burnaby, there were only 3 sales last week, down from 7 the week before, and 20 the week earlier.
Vancouver West saw a dramatic decrease too – falling to only one sale in the last week from 27 sales during the week of July 11 to 17. Vancouver East went through a similar course– where only 5 sales were marked in the last week of June, down from 34 sales in the week of July 11 to 17.
For each area combined in Vancouver, July’s last week’s sales numbers marked a 75% decline from the second last week of June.
Price Drop Predicted in Vancouver Real Estate Market, But Not a Steep One!
According to Anne McMullin, president of the non-profit industry association Urban Development Institute, certainly, the tax is unlikely to improve affordability for local Canadian buyers, who are in bidding wars over the stagnant supply of homes in Metro Vancouver.
She said that removing foreign interests might bring down the price of $4 million homes to $3.5 million or $3 million in desirable neighborhoods, but it is doubtful that they will come down below that.
According to Thomas Davidoff, the University of British Columbia, professor of economics, apart from imposing foreign buyer tax to control skyrocketing prices, the province should have had taken additional measures to increase development and density.
He said that for softening price growth, it was important to add apartments and townhomes.