Existing home sales in Metro Vancouver fell almost 40 per cent in January from a year ago and prices are beginning to follow.

 

 

The Real Estate Board of Greater Vancouver said Thursday there were 1,523 sales in January 2017, down from 2,519 sales a year ago and a drop of 11.1 per cent from the 1,714 sales in December. The January sales figures were 10.3 per cent below the 10-year average for the month.

In terms of prices, the board said its MLS Home Price Index composite benchmark price for all residential properties in Metro Vancouver was $896,000 in January, a 3.7 per cent decline over the past six months and a 0.2 per cent drop from December, 2016.

“From a real estate perspective, it’s a lukewarm start to the year compared to 2016,” Dan Morrison, president of the board, said in a statement. “While we saw near record-breaking sales at this time last year, home buyers and sellers are more reluctant to engage so far in 2017.”

The falling numbers come as Vancouver continues to grapple with the impact of a 15 per cent foreign property transfer tax the province began imposing in August. Last month, the British Columbia premier, Christy Clark, backtracked on her foreign tax by saying foreigners with work permits who live and work in B.C. would be exempted.

 

Meanwhile, in Toronto, realtors released a study on Tuesday to fend off cries for a similar tax in Canada’s largest city. The study from TREB showed almost five per cent of purchases in the Greater Toronto Area can be traced to foreign buyers.

January sales figures for Metro Vancouver’s detached properties — thought to be highly sought after by overseas buyers — saw only 444 deals. The slower pace of sales, represented a 57.6 per cent decline from a year ago.

The benchmark price for detached properties was $1,474,800, a 6.6 per cent decline over the last six months and a 0.6 per cent decrease compared to December 2016.

Supply appears to be ramping up quickly. The total number of new listings for detached, attached and apartment properties in Metro Vancouver was 4,140 in January, 2017. That figure represented a 6.8 per cent decrease from a year ago but was up 215.5 per cent from December, 2016.

The total number of homes listed for sale on the Multiple Listing Service in Metro Vancouver climbed 9.1 per cent over the last year to 7,238 in January, 2017. Total listings jumped 14.1 per cent from the 6,345 listings in December, 2016.

The sales-to-active listings ratio of 21 per cent in January, 2017 was 21 per cent, the lowest ratio for the region in two years.

“Analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months,” the board said in a statement.

Morrison said property type is defining activity in the Greater Vancouver market. “The townhome and condominium markets are more active than the detached market at the moment,” Morrison said, adding while detached home prices are falling, townhome and condominium prices are holding steady.

Apartment property sales did decline 24.7 in January, 2017 from a year ago but the benchmark price of $512,300 was only off 0.3 per cent over the last six months and up 0.4 per cent from December, 2016.

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JENNIFER GAUTHIER/METRO

 

So far it’s been a tale of two real estate markets in Metro Vancouver, as detached homes slumped but condos and townhouses remained in high demand.

It’s the story the Real Estate Board of Greater Vancouver continues to tell following the B.C.’s government’s surprise 15% property transfer tax on foreign nationals and the federal government’s recent move to tighten mortgage requirements.

“We’re certainly seeing the strata properties doing very, very well in most areas, however there’s no question that the detached market is taking a bit of a hit,” said Dan Morrison, chair of the Real Estate Board of Greater Vancouver.

But on the ground, things look a little different, said Steve Saretsky, a real estate agent who specializes in downtown and Westside condos in Vancouver.

“It’s still the case that they’re very different markets but the gap is narrowing,” Saretsky said.

Statistics published by REBGV show that prices have fallen for most property types in many neighbourhoods between September and October. MLS statistics show the benchmark price for a condo on Vancouver’s Westside fell 2.5 per cent between July and October. But, “from what I see it’s down five per cent,” Saretsky said, basing the statement on his own regular tracking of property selling prices.

Between 2015 and 2016, home prices in Metro Vancouver increased at nosebleed levels, in some areas rising 40 per cent over the course of a year. While the price increase began in the detached home market, it also affected the condo and townhome market as well as the outer suburbs.

Saretsky believes that effect will now continuing in reverse, with detached homes being the first to slow while condos, and then surburban properties, likely following.

Morrison sells real estate in West Vancouver, where listings dropped 72 per cent between August and October 2016, compared to the same period in 2015. Sellers who are able to wait are sitting on the sidelines right now, waiting to see what the traditionally busy spring period will bring, he said.

That’s what concerns Saretsky. Both buyers and sellers are currently sitting the market out, but if sellers flood the market in the spring with a lot of inventory, “that’s what could potentially topple the market.” He added that the currently low inventory is the only thing keeping prices from falling more dramatically.

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