Home sales in Metro Vancouver in August dropped to more “typical levels” and off the record-breaking pace seen earlier this year.
“The record-breaking sales we saw earlier this year were replaced by more historically normal activity throughout July and August,” Dan Morrison, REBGV president said in a release. “Sales have been trending downward in Metro Vancouver for a few months. The new foreign buyer tax appears to have added to this trend by reducing foreign buyer activity and causing some uncertainty amongst local home buyers and sellers.”
New numbers released by the Real Estate Board of Greater Vancouver (REBGV) show residential property sales totalled 2,489 in August 2016, a decline of 26 per cent compared to the 3,362 sales in August 2015. That is also 10.2 per cent fewer than sales in August, 2014 and one per cent fewer than the sales in August, 2013.
Compared to July sales, August 2016 sales were down 22.8 per cent.
The 15 per cent foreign buyers tax came into effect on Aug. 1, but it will still take some time to really understand the impact of the new tax, according to Morrison. “We’ll be interested to see the government’s next round of foreign buyer data,” he said.
He said for the past four months they have been reporting that the market has been softening.
“That’s a trend we expected to see into August, as we move into what is traditionally the slowest months of the year other than Christmastime,” he said.
“But one of the challenges is that we’re comparing it to August last year, which was a phenomenal month. We’d never seen an August like that so when you’re comparing it to the exception of course it looks like the sky is falling, but of course the sky isn’t falling.”
There was a slight increase in the number of listings in Metro Vancouver in August, up 0.3 per cent from August last year. However, it was a 18.1 per cent decrease compared to July, 2016.
Currently, there are 8,506 properties listed for sale in Metro Vancouver, which is a 21.9 per cent decline compared to last year’s listings for August.
“In aggregate, we continue to see an imbalance between supply and demand in most communities. However, we’re also seeing fewer detached sales in the highest price points and fewer detached home sales relative to all residential sales,” Morrison said. “This is causing average sale prices to show a decline in recent months, while benchmark home prices remain virtually unchanged from July.”
Analysts use benchmark prices to look at typical home prices in a region. Currently, the benchmark price for all residential properties in Metro Vancouver is $933,100, which is a 31.4 per cent increase compared to August, 2015.