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Local home prices have seen 'final hurrah:' Royal LePage

Last Updated Oct 13, 2016 at 8:54 am PDT

(iStock Photo)

The number of sales appears to be slowing, says the agency, as prices continue to go up

The MLS benchmark price for a residential home in the region is just under $1 million

VANCOUVER (NEWS 1130) – The number of homes selling in our region is seeing a drop off, according to Royal LePage, but prices continue to go up.

The agency’s Alan Stewart attributes the slowing sales numbers to market uncertainty following the introduction of the 15 per cent foreign buyers tax, but he suspects prices will start to level off after an extended period of rapid increases.

“People are taking a wait and see approach when it comes to the 15 per cent international buyers tax, which we expect not to have a dramatic effect on sales volume,” says Stewart. “But whenever there’s the opportunity of prices going down tomorrow, people will tend to wait before they make an investment.”

The local city with the largest price increase was West Vancouver, where two-storey houses jumped a remarkable 42 per cent year-over year. Vancouver saw homes sell for 34 per cent higher than last year, going for $1.5 million.

“The prices are up across the board,” says Stewart. “Sellers are sensing that we might be at the peak of the market, so we’re seeing more listings come online, and buyers are taking a wait and see approach, so demand is down. Whenever we see demand down and supply up, we tend to expect to see prices follow suit. We haven’t seen that this quarter. Things remain stable across the board.”

Last month, the Real Estate Board of Greater Vancouver found homes sales totalled 2,253, a decrease over September 2015. The MLS Home Price Index benchmark for all residential homes across the region was said to be $931,900, which is a 28.9 per cent jump compared to the previous September.

Finance Minister Bill Morneau says it’s “impossible to say with absolute clarity” what the impacts of new mortgage rules introduced by Ottawa earlier this month will be.┬áThe federal government announced a series of changes aimed at stabilizing the country’s housing markets, including tightening mortgage rules that will put new limits on how much some buyers can borrow.

The new rules mean that as of Oct. 17th, all insured mortgages will have to undergo a stress test to make sure borrowers will still be able to make their payments even if interest rates go up in the future.

Ottawa also closed a tax loophole so that only Canadian residents can use the principal residence tax exemption. The exemption allows homeowners to avoid capital gains tax when they sell a home as long as they were living in it.