Fall in Housing Sales, But No Fall in Prices
Vancouver 2016 has been at the center of attention all over the real estate world. Since the turn of the year, the market saw a boom in which records were broken year after year in property sales. It peaked during the latter part of the spring and early summer months.
And then, to subdue the rising demand of housing properties, a Foreign Buyers’ Tax was imposed in August. The massive 15 percent levy in Metro Vancouver on top of other existing taxes caused a sudden halt as the number of property sales plummeted down beginning August and then in September.
The falling trend in housing sales seems to have continued into September as a mere 2,253 homes were sold, a decrease of 9.5 percent from August, and a drop of 32.6 percent from September of 2015. These statistics released by the Real Estate Board of Greater Vancouver (REBGV) shows how the tax has achieved its ultimate target – to prevent immigrants from buying houses in Vancouver.
But what hasn’t been warranted yet is the fact that despite the cool-down in the market, housing prices continue to remain the same as they were when the market was on a full blast. The benchmark price for residential properties in Metro Vancouver remained at $931,000 in September, which is a meager 0.1 percent decrease from August, but a comparatively massive 28.9 per cent increase from September of last year.
Foreigners Continue Towards Greener Pastures
The Foreign Buyers’ Tax continues to thwart off immigrants Vancouver to more appealing real estate markets like Toronto, Ottawa, and Montreal.
Chinese realty website, Juwai.com presents a strong testimony to this fact. Their website contains over 2.4 million real estate listings across 58 countries, and for a majority of the past few years, Vancouver has been among their top clientele demands.
But with the implementation of the new tax, the number of inquiries for housing properties in Vancouver dropped by a drastic 81 percent over the course of August and September. Meanwhile, the demands in other Canadian metros continued to rise.
Experts Predict Allure Will Shift to Commercial Real Estate
Real estate experts believe that foreign real estate investors’ attention will shift towards the commercial real estate market to steer away from the new housing tax. This would be a clever way to ghost past the new tax but, at the same time, continue investments in Metro Vancouver.
Vancouver has already witnessed a huge rise in its commercial real estate dealings in 2016. The first half of the year saw transactions up to $7.14 billion. This was almost double of the total tally within the same period in 2015, and nearly triple than that of 2014.
Proposed Empty Home Taxes to be Introduced After Public Consultation
Due to the falling real estate market, the City of Vancouver has come up with an online survey. This survey is to gain public input on a proposed tax that is to be levied on empty homes. Many consider this as a measure to tackle the sudden decline in housing sales, and eventually encourage residents to either sell or rent out vacant residential properties.
The survey, which was first designed by Vancouver Mayor Gregor Robertson in early September, concentrates on the particulars of the tax and what the residents think about it. The tax could well turn out to be as much as 2 percent of the house’s assessed value.
UBS Switzerland Reports Reveal Vancouver Real Estate as the Highest Bubble Risk in the World
Under such varying and fluctuating circumstances, it comes as no surprise that Vancouver now has the unenviable tag of "World’s Highest Bubble Risk," according to a UBS Switzerland report released on September 27.
Despite commodity prices constantly on the fall and a global recession on the horizon, the Vancouver housing prices seems to be undeterred by the ongoing global scenario. Many critics continue to abide by the notion that Vancouver’s real estate prices are over inflated, and have been since 2007.
With such inconsistency in the Metro Vancouver real estate market, it is only right that you avail the services of a realtor for guidance and consultation if you plan on buying or selling a house in Vancouver. Sutton Centre Realty offers some of the best realtors in Vancouver.