VANCOUVER (NEWS 1130) – Vancouver’s residential real estate market is at standoff that doesn’t appear to have an end in sight.
The city saw a 26 per cent drop in sales of all types (condos, attached and single family homes) last year over 2017 and that has created two diverging points of view, says Sotheby’s International Realty Canada President and CEO Brad Henderson.
“There are more properties on the market than there are buyers and there is a mismatch between buyer expectation and seller expectation. So sellers think that the market isn’t as bad and buyers have an opposite view — they think the market is going to continue to correct and therefore prices will be lower in the future.”
Sales in the city’s condo market did dip, but it remains the most affordable and resilient option. Meanwhile, Vancouver’s single-family home market registered a third consecutive year of declining sales activity.
The firm’s newly-released 2018 Year End Real Estate Report points to a “barrage of government and regulatory interventions compounded by gradual mortgage rate hikes” for the slowdown in sales of homes over a million dollars.
Luxury sales — homes valued at over $4 million — fell even further, with a 49 per cent dip.
“We saw the government add another five percentage points to the foreign buyers tax and then introduce a couple of other taxes on top of it. That is what’s led the Vancouver market to slow down more than the Toronto and Montreal markets,” Henderson said.
That has just furthered the standoff as those looking to sell somehow hope to turn back the clock.
“Some sellers are pining for the historical times, when market values were much higher. Whether that’s 2016 or 2017, they’re pining for those days. Whereas the buyers are feeling there’s a reduction in the amount of activity and therefore if they wait, they’ll get a better deal. That mismatch is primarily what has been driving the reduction in activity,” Henderson said.
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But the report points out the benchmark price still remains quite high. At $1,280,000 for Vancouver West and $1,056,000 for Vancouver East, the average price of a home is still out of reach for many.
“That is a concern and trying to shape demand as the government has been doing, is a very blunt instrument and has only modest effect on creating more affordable housing units,” Henderson said.