Home buyers, sellers in Metro Vancouver sitting on the sidelines: report

METRO VANCOUVER (NEWS 1130) – There seems to be more nervousness in Metro Vancouver real estate.

A snapshot of sales over $1 million suggests buyers are worried they’ll pay too much and sellers are worried they won’t get enough.

With even the previously super-heated condo market slowing down, a report from Sotheby’s International Realty finds sales of all types of properties over $1 million dropped by almost a quarter over the summer compared to the same time a year ago.

For luxury properties over $4 million, there was a 33 per cent drop in Metro Vancouver. In contrast, sales are rising or rebounding in in Montreal and Toronto.

President and CEO Brad Henderson said buyers are wary. “The new policy measures introduced by the provincial government have really put a dampening on the marketplace.”

Those measures are the expanded foreign buyers tax, additional property transfer tax, and the notion of a speculation tax, which Henderson said has created more nervousness in the market.

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He said Metro Vancouver’s market was “incredibly active” in 2015 and 2016, “to the point where there was a significant year-over-year increase in the number of homes that were bought and sold. That was alarming to many people.”

But Henderson said the foreign buyers tax, in particular, had a big impact on the market.

“Most people would say that the incidents of non-Canadian residents buying properties in Vancouver is actually quite low, compared to the total marketplace. But it was the perception that perpetuated that particular policy.

“Right after that, the activity levels in Vancouver dropped very significantly — in many cases, as much as half — on a year-over-year basis. It stopped prices from increasing anywhere near what we had seen in the previous 12 to 18 months. That continued for the balance of 2016. Then in 2017, we were starting to see some improvement in activity, albeit at a much slower rate.”

Henderson said since March of 2018, with the introduction of the other measures, a lot of buyers and sellers have been sitting on the sidelines, watching how the market reacts.

“As a consequence of all of that, we’ve seen a very significant slowdown in the number of homes that are bought and sold.”

 – With files from Kurtis Doering

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