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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.

4056 West 33rd Avenue, Vancouver, British Columbia V6N 2J1
4056 West 33rd Avenue, Vancouver. Asking: $6,988,000.00

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.

The Charleson Sales from $3,600,000
The Charleson Sales from $3,600,00. Source: buzzbuzzhome.com

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.

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Steady Drop in Vancouver House Sales; July Experienced Price Rise

Sales Slow In the Country’s Costliest Real Estate Market

Vancouver area house sales saw a steady drop in July. On the other hand, the short supply of properties on the market has led to price rise almost a year after the B.C. government put a foreign buyers’ tax to curb the once-hot market.

On August 14, 2017, British Columbia Real Estate Association published data that reveals the sink in the number of houses sold across Metro Vancouver in the last month compared with July 2016, and the growth in the prices.

In July 2017, in total, 3,012 houses were sold across Vancouver – an 8.8% depression compared to 3,301 homes sold a year ago. However, the region witnessed price rise, with the average outreaching $1,029,786. This inclines that year-over-year, there is a 2.2% spike in the home prices.

July Statistics – Image Source: rebgv.org

The Prices Do The Talking!

Last month, prices augmented across all regions of British Columbia. Vancouver, the most populous city of British Columbia, made highlights with 18% price hike over the year, hitting an average of $452,353. The average home price upturned 11% to $644,510 in Victoria. The South Okanagan region and Kamloops were up by 9.5% to $415,720 and 8.1% to $367,303 respectively.

More Balanced Market Conditions Expected Before 2017 Ends

BCREA chief economist Cameron Muir stated, “Strong economic growth, an expanding population base and a lack of supply continue to drive B.C. home sales and prices this summer.” Though, he added that the decline in sales and consistent rising inventory has been easing the harsh market conditions experienced lately.

“Home sales have edged back 4% since May, with active listings beginning to bounce back from a 20-year low”, Cameron Muir stated. “If these trends continue, it may signal that more balanced market conditions could emerge before the end of the year.”

All over British Columbia, the number of homes sold diminished 6.3% year-over-year, with 9,275 homes sold in the month in total.

Repeat House Sales Ascent Last Month

The Teranet- National Bank Composite House Price Index indicates a 7.8% increase in repeat house sales and 8.56% year-over-year across Metro Vancouver last month. This indicates price modifications for repeat single-family houses’ sales.

The year-over-year progress was beneath the national average upsurge of 14.17%. The upturn country-wide was driven by growth in Toronto, however, according to Teranet, Vancouver’s growth is slowing as non-condo properties’ prices are tumbling.

Demand For Housing, Property Listing & Home Prices In Vancouver

According to the real estate board’s president, Jill Oudil, the demand for housing in Vancouver now differs by property type and location, with some parts of the real estate market still witnessing bidding wars.

There is only 0.3 per cent increase in the number of properties newly listed for sale from last year. If we talk about the sales-to-active listings ratio, the figure is 32.2 %.

According to sources, when the ratio is above 20% for many months, house prices often experience skyward pressure.