VANCOUVER – Vancouver’s real estate market had a roller-coaster year in 2016, peaking with record sales in the spring but wrapping with a 5.6 per cent drop from 2015, the area’s real estate board said Wednesday.
Sales of residential properties in Greater Vancouver hit an all-time high in March. Figures show the market began to slow down before the province implemented a 15-per-cent foreign-buyers tax in August.
The effect of the tax is still being debated, but the second half of 2016 clearly showed a cooling real estate sector, with sales and eventually prices declining. The Real Estate Board of Greater Vancouver said sales were down 39.4 per cent in December compared with the same month in 2015.
“(The tax) came in and scared everybody. We’ve had several months now of people sitting on the sidelines and waiting to see what’s going to happen,” said board president Dan Morrison.
“Our best guess is that we’re going to see in the springtime that people still realize that the market is carrying on and the sun still rises.”
The Real Estate Board of Greater Vancouver covers a large portion of Metro Vancouver, including Vancouver, the North Shore, Burnaby, New Westminster, Richmond, Coquitlam and Port Moody.
Meantime, the Fraser Valley Real Estate Board, which covers the growing cities of Surrey, White Rock and Langley, reported on Wednesday that 2016 was the strongest year in its history.
The board processed 23,974 sales in 2016, 13.6 per cent more than 2015.
Sales of townhouses and apartments reached their highest level in the board’s history.
“Our region boasts a vast range of homes available at all price points, which made it a very enticing option for buyers of all types last year,” said board president Charles Wiebe in a statement.
Still, Wiebe said at year’s end the board saw sales return to more “typical levels” and low overall inventory. Sales in December were down 37.4 per cent compared with the same month last year.
The Greater Vancouver Real Estate Board said there were 39,943 detached, attached and apartment properties sold last year, down from the 42,326 sales recorded in 2015.
Prices are still up compared with 2015 but have fallen from peak levels last summer.
The composite benchmark price, a representation of the typical residential property in Greater Vancouver, was $897,600 in December, representing a 17.8 jump from the same month the previous year.
For detached homes, the benchmark price was $1.48 million in December, representing a five per cent decrease from six months earlier but an 18.6 per cent increase from December 2015.
Tom Davidoff, a professor with the University of British Columbia’s Sauder School of Business, said prices take time to adjust.
“You tend to see a slowdown in sales, then prices will follow, and it takes a long time for markets to hit their peaks and troughs,” he said.
Davidoff said during the first half of the year, there were far more buyers than sellers, enabling prices to skyrocket. That dynamic started to shift in the fall, but now many homeowners simply aren’t putting their homes on the market, he said.
While the real estate market typically slows down in winter, the number of new listings for residential properties in Greater Vancouver fell dramatically in December to 1,312 — down 35.1 per cent from the same month the previous year.
Adil Dinani, a real estate agent with Royal LePage, said he had some “candid conversations” last month with clients whose homes had been on the market for months. Their asking prices were better suited to the height of the frenzy, he said.
“The reality is the market’s no longer there. We’re in a new market and the prices have corrected,” he said. “Some sellers decided to take their homes off the market. There was no imminent need to sell.”
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Note to readers: This is a corrected story. A previous version said home prices in Greater Vancouver in December slid by 17.8 per cent compared to the same month the previous year.