It’s taken nine months, but the Vancouver housing market may have finally shaken off the foreign buyers tax, data from a home price index suggested on Wednesday.
The Teranet-National Bank of Canada House Price Index showed that Vancouver home prices grew by 8.2 per cent year-over-year in May, and 1.46 per cent month-over-month.
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At 252.30, the index reached its highest level since September 2016, which was one month after a 15 per cent property transfer tax on foreign buyers came into effect in Metro Vancouver.
The index has fluctuated since then, hitting as low as 242.64 in December.
Meanwhile, data provided by the Canadian Real Estate Association (CREA) showed the composite home price for Vancouver hitting $941,100 in April, the highest it’s ever been.
The composite had dropped from $933,100 in August 2016, when the tax first came into effect, to $896,000 in January, but now it appears to have recovered.
House prices largely remained unchanged in the eight months following the tax’s introduction, as noted in a chart released by BMO economist Douglas Porter on Tuesday — a marked contrast with growth of 20 per cent in the months before it came into effect.
But the ninth month appears to have bucked the trend.
At 8.2 per cent, Teranet said Vancouver house price growth was strong, but it was still below the national average.
Toronto’s housing market saw the strongest price growth, jumping 3.6 per cent month over month and setting a “record for any month,” Teranet said.
Home prices there jumped by 28.73 per cent year over year, a rate that also topped all other cities.
Toronto’s home price growth is expected to take a breather with the implementation of the Fair Housing Plan, which includes a 15 per cent tax on non-resident speculators in the Greater Golden Horseshoe area, which includes Toronto, Niagara and Peterborough.
Like in Vancouver, experts expect the effects of the plan to be short-lived.
- With files from The Canadian Press