Sales activity was down from levels in the previous month in close to 60 per cent of all markets in August, led by a steep decline in Greater Vancouver following the introduction of a new property transfer tax on homes purchased by foreign buyers.
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A for sale sign displays a sold home in a development, in Ottawa, on July 6, 2015.
Sales of luxury homes have picked up in the Toronto area at the same time as they have dropped in Vancouver.
Prices were up in the month in seven of 11 markets surveyed, led by gains in the two largest markets, Toronto and Vancouver, where heady appreciation since 2010 has sparked fears of a housing bubble. Even with the recent pullback in activity, it still expects British Columbia to post the largest annual increase among the biggest provinces, with a 14.6% increase.
The swings in the two markets largely balanced out the national figures, which are still expected to see sales increase by about six per cent this year to 535,900 units for a record high if population growth isn’t factored in.
Average home prices continued to climb in August, the real-estate group said, rising 5.4% from a year earlier to 456,722 Canadian dollars (US$346,080).
Sotheby’s says increasing interest from foreign buyers and local market fundamentals are likely to boost the market in Toronto.
With the decline in August, national sales have dropped 6.9 per cent below the record set in April, but were still 10.2 per cent above August 2015. The 15 percent levy was brought in after an outcry from local families struggling to afford homes that now chew up 90 percent of average before-tax income, and because of warnings from domestic and worldwide policy makers that Vancouver’s housing boom was a threat.
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Vancouver condominium sales over $1 million in July totalled 93 – up 29 per cent from a year ago – but sales in August fell 49 per cent compared with the same month last year, dropping to 40.
