A new tax on foreign buyers has had a huge impact on the Vancouver property market.
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As for Toronto, where home sales soared 23.5 per cent year-over-year in August, Ashworth balks at the idea that the elevated level of activity has much to do with foreign buyers turning east.
The industry group said sales fell 3.1 per cent in August from July, the largest monthly drop in almost two years, as a tax on foreign buyers in Vancouver sent buyers to the sidelines and doused activity in Canada’s most expensive market.
“They recently reported.an 81-per-cent drop in the numbers of inquiries on that website for Vancouver and a 146-per-cent increase in inquiries for Toronto”, Henderson said.
The MLS Home Price Index composite benchmark price for all residential properties in Metro Vancouver is now $933,100 (US$711,801). The number of newly listed homes declined 2.7% from July to August. 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 global policy makers that Vancouver’s housing boom was a threat.
Toronto has taken over top spot when it comes to luxury real estate sales in Canada, widening its lead over Vancouver.
As Bank of Montreal economist Robert Kavcic put it, “The big story behind the national figures (which you can go ahead and call irrelevant) [is that] Vancouver has gone cold, while Toronto is heating up to a rolling boil”.
The latest increase is the 20th consecutive month that the house price index has climbed month over month in Vancouver. “That sets the stage for a moderate price correction in Vancouver”.
Meanwhile, home prices posted y-o-y gains in Greater Moncton (6.6%), Regina (3.7%), Greater Montreal (2.5%) and Ottawa (1.7%). That forecast is slightly below one made three months ago, when a 6.1 per cent gain in sales and a 10.8 per cent rise in prices was projected. But the real estate industry’s benchmark prices, which represent the sale of typical properties, remain strong. On a quality adjusted basis, existing home prices rose 14.2 percent year-on-year. Sales over $4 million comprised less than.05 per cent of the total transactions, according to Sotheby’s.
The drop in sales volume stands in sharp contrast to the continued rise in prices. The ratio had previously been as high as 65.3% in May.
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Additionally, prices were down 0.9% y-o-y in Saskatoon in August, but are on track to begin rebounding before year-end should current trends persist.
