August 2, 2016 4:37 pm
Updated: August 3, 2016 11:49 am

Metro Vancouver home sales dropped 75% after foreign buyer tax announced: realtor

WATCH ABOVE: Metro Vancouver's new property tax on foreign buyers came into effect Tuesday, aiming to cool the region's red hot housing market. As Robin Gill reports, even though Canadians won't be paying the tax they could still feel its effects.

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The number of home sales in key Metro Vancouver municipalities took a major hit after the foreign buyer tax was announced, according to a Vancouver realtor with data from the MLS. But experts say it might be too soon to tell.

Steve Saretsky has analyzed the number of home sales in Richmond, Burnaby, Vancouver West, and Vancouver East for each week of July and discovered a massive drop-off after the province announced a 15 per cent tax for foreign buyers on July 25.

Calling the response in Vancouver’s real estate industry “absolute mayhem”, Saretsky said he did not personally have any clients back out of offers but has the data to prove the marked impact the tax has caused so far.

In the week of July 25 to 31, there were only three detached home sales in Richmond, compared to 12 the week earlier and 25 the week before that. In Burnaby, there were also only three sales last week, down from seven the week before, and 20 the week earlier.

Vancouver West also saw a dramatic decrease – falling 96.3 per cent from 27 sales during the week of July 11 to 17 to only one sale between July 25 and 31.

Vancouver East was similar – down from 34 sales at three weeks ago to only five sales last week. That is a decrease of 85.2 per cent.

For each region combined, last week’s sales numbers were a 75 per cent decrease from the week before.

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“Buyers and sellers are basically at a stand still to see what will happen next with the market,” said Saretsky in a recent blog post. He adds that the numbers might also be distorted because of the long weekend.

Saretsky also looked at the sales of attached homes – condos and townhouses – and found a substantial loss there as well.

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“More sales will trickle in from the previous week but regardless the end number should be much less than previous weeks. The market was already slowing and it appears Christy Clark’s new tax has slowed it even further,” said Saretsky.

Data from July 2015 shows just how slow last month was in comparison.

Detached home sales for July 2015:

Richmond: 218
Burnaby: 153
Vancouver West: 155
Vancouver East: 149

Saretsky’s data says there were only 40 detached home sales in Richmond from July 11 to 31 this year, 30 sales in Burnaby, 38 in Vancouver West, and 34 in Vancouver East.

“[It] seems a bit high to blame on a tax that is only targeting a specific sector of the market,” says Tsur Somerville, the director of the UBC Centre for Urban Economics and Real Estate.

But Somerville says it is expected that the tax would cause some uncertainty in the market.

“People who are thinking of buying or thinking there is going to be a drop in prices in response to the tax are waiting to see how that plays out, but I don’t think I would judge a policy entirely on one week’s worth of data.”

Somerville says he would look at the data for three months before the tax was announced and three months after the tax to see the true effects.

Complete real estate statistics for last month have not yet been released by the Real Estate Board of Greater Vancouver but are expected early this week.

© 2016 Global News, a division of Corus Entertainment Inc.

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