21 Aug Luxury Home Sales In Vancouver Plummet
All around the world, people seek a luxurious and dream residence. Vancouver luxury homes are the perfect combination of beauty, style, elegance & more. The city offers amazing quality of life and all the modern amenities.
The previous years in Vancouver saw high demand for luxury homes. But the scenario has changed this year. Let’s understand exactly why and how this has happened:
Introduction of Foreign Buyer Tax & Its Impact
When compared to July 2016, Vancouver house sales over $1 million have plunged in the first half of 2017,
The city has witnessed a slowdown in luxury home sales. This is due to the 15 per cent foreign-buyer tax introduced in August 2016, in a struggle to cool the previously red hot market. Only after living through historic highs the previous year, sales activity in the $1 million-plus market stabilised in the first half of this year.
In the $4 million-plus market, overall luxury sales experienced a 52 % year-over-year slump to 211 units.
What’s more? The BC Government’s latest data suggests foreign buyers have been decreasing for months.
Chinese Cities Drive Up Luxury Home Prices
Limiting capital outflows has been China’s zealous effort.
In the first three months of 2017, luxury house prices in prominent global cities escalated by 4.3% compared to the same period last year, and this upsurge can largely be credited to China’s cities.
Chinese officials limited foreign currency transactions to a paltry $9,000 as of July 1.
The new controls are aimed at ceasing “ants moving house,” says Anne Stevenson-Yang, of J. Capital Research Ltd., one of the leading experts on the Chinese economy. The term is used in China for getting many people to make small money transfers to eventually transfer plenty to purchase property.
Though folks discover ways around the rules, Anne says. Mostly, the rich already have their wealth overseas, thus they are not impacted by new controls. Irrespective, foreign exchange reserves have upturned every month since January.
In the present, the slowdown is already surfacing in Vancouver’s luxury home market. Single family home sales above $3 Million have jumped 27% year over year while inventory has hiked 24%.
It will be interesting to see how long China withstands the latest tightening. If China stays determined on limiting outflows, Vancouver housing market won’t be the only one to experience the impact. According to a report, there will be an 84% decline in offshore property buying in 2017.
The people of Vancouver may finally be able to heave a sigh of relief.