Vancouver home sales down 26 percent after foreign ownership tax

Eagerly-awaited numbers released from the Real Estate Board of Greater Vancouver show how badly home sales tanked in the region after the introduction of a B.C. foreign buyer tax at the end of July.

The Real Estate Board of Greater Vancouver released the data a month after the British Columbia government implemented a 15-per-cent tax on foreign buyers in Metro Vancouver in an effort to chill one of the hottest markets in North America.

The total number of listed properties for sale in Metro Vancouver declined nearly 22% since this time last year, and dropped nearly 2% from July of this year.

From a historical perspective, last month’s sales were 3.5 per cent below the 10-year sales average for the month, he noted in a statement.

Despite the drop in sales, the benchmark price for a Vancouver home surged 31.4 per cent year-over-year in August to $933,100 amid a 21.9 per cent drop in properties listed for sale. For example, the median sale price for a home in Richmond in July is said to be $500,450 while last month it went down to $478,000.

Dan Morrison, president of the real estate board, said the new numbers show that record-breaking sales seen earlier this year have been replaced by “more historically normal activity” in July and August.

The real estate board says it is still a seller’s market based on the data released Friday.

Hogue also doubted the new tax would permanently drive away Chinese buyers.

Chipman says the announcement caused panic among buyers, leading many to just take a temporary step back.

As sales slowed, the price of a house, condo or townhouse in Metro Vancouver continued to rise.

The tax was introduced in August by the provincial government to cool foreign speculation that was being blamed for double-digital increases in property values.

According to the REBGV, the August sales total was 3.5 percent lower than the 10-year average for that month.

At the same time, governments of all levels are deriving the biggest share of their revenue from housing and related activities – about 17 percent – in about two decades, according to a National Bank of Canada report this month. The average price of a detached property declined 17 percent on the month, and 0.6 percent on the year, to C$1.47 million ($1.13 million) in August, the lowest since September 2015.

DETACHED PRICES SOAR: The benchmark price for detached properties increased 35.8 per cent from August 2015 to $1,577,300.

Sales of apartment properties hit 1,343 in August, a 10.1 per cent decline compared to the 1,494 in August 2015.

The benchmark price is a representation of the typical property sold in an area, excluding the most expensive transactions on the Multiple Listing Service.

New listings in the Vancouver area totalled 4,293 in August, a slight increase from the 4,281 units listed for the same month in 2015.