The slowdown in home sales in Vancouver for the third consecutive month indicates the possibility of reduced dynamism in the market even prior to the introduction of a new tax, the Canadian Real Estate Association said on Monday (August 15)
CREA noted that the B.C. government’s recently implemented 15 per cent tax on foreign home buyers—which has invited strong accusations of crystallizing discrimination against overseas nationals—is not yet playing a major role in cooling down Vancouver, Bloomberg reported.
“[Sales] are being reined in by a lack of inventory and a further deterioration in affordability,” CREA chief economist Gregory Klump wrote in the report. “It will take some time before the effect of the new tax on sales and prices can be observed.”
The latest CREA numbers revealed that sales as a share of new listings in Vancouver declined to 62.9 per cent in July, down from 71 per cent the previous month.
Meanwhile, home sales in the city dropped 6.7 per cent month-over-month and 18.3 per cent year-over-year in July, down to 3,411 transactions.
“It does look like we have seen momentum slow a bit,” BMO senior economist Robert Kavcic agreed, adding that the Vancouver market at present is characterized by scarce supply and greater purchasing power owing to a strong economy.
While the city’s benchmark price gains have slowed down to 1.4 per cent last month, Vancouver still plays host to the most expensive homes in the country, with the average sales price sitting at C$1.04 million as of July.