Luxury home sales up 41 per cent so far this year
Posted November 3, 2016 7:39 am.
Last Updated November 3, 2016 1:40 pm.
This article is more than 5 years old.
VANCOUVER (NEWS 1130) – The 15 per cent foreign buyers tax brought in by the provincial government in early August is slowing the sales of homes over $1 million, according to the latest luxury real estate report from RE/MAX, but for homes over $3 million, the market grew 41 per cent in the first nine months of 2016.
“At this point in the luxury segment, things are looking fine,” says Regional Executive Vice President for RE/MAX Elton Ash. “I wouldn’t say we’re looking at an inflationary market and we’re not looking at a deflationary market. It’s balanced at this point.”
But Vancouver sales of $1 million properties were only up by three per cent overall, and single-family home sales in that range declined by seven per cent year-over-year through the end of September.
The RE/MAX report says one factor contributing to the decrease is the foreign buyers tax, which has resulted in slowing demand for single-family detached homes from off-shore buyers. “Though there may be other factors at play as well, such as higher inventory lessening buyers’ sense of urgency,” Ash tells NEWS 1130. “The Vancouver real estate market is at an interesting crossroads right now in how the tax and the government’s tightening of mortgage rates will affect things overall.”
Ash suggests it will be a few more months yet before we get a clearer picture of the effects of measures meant to slow down Metro Vancouver’s real estate market. “It’s an evolving story since August 2nd but, anecdotally at this point, we have seen a significant drop off in demand in the luxury end of the market in Vancouver due to the tax itself.”
But as sales decrease, prices have yet to follow. “Not yet, and that’s why I think there’s some confusion over this. We are seeing a drop in unit sales, but we have not seen a drop in price.”
Ash points to the Canadian Real Estate Association’s composite price index, showing prices have dropped about one percent overall so far this year. “But, again anecdotally, we haven’t seen the luxury price affected. I would anticipate we will start to see that by the end of November.”
