Housing in Vancouver was one of the biggest stories of 2016. A year ago, the Vancouver real estate market was described as a hot and sizzling market. The housing prices in Vancouver took a great leap and mushroomed over the year. These high rates were considered to be a boon for some and bane for others since after the evaluation, the cost of properties increased by double digits; in a few cases, the costs were raised by 40%.
In March 2016, the yearly homelessness count in Vancouver showed the highest number of people sleeping outside in ten years. Further, in June, the value of single detached houses and condos shot up by 40 and 25 percent respectively. The Finance Minister, Mike de Jong made an announcement of imposing 15 percent tax on foreign nationals. Along with this tax, the Vancouver city was also introduced to empty homes tax and new policies concerning the rental markets. The drastic increase in real estate prices affected the rental market as well.
The Present Situation
In the words of Dan Morrison, Real Estate Board of Greater Vancouver (REBGV) president, “It (2016) was an eventful year for real estate in Metro Vancouver. Escalating prices caused by low supply and strong home buyer demand brought more attention to the market than ever before.” Moreover, the Metro Vancouver real estate market experienced its third highest selling year on record in 2016, behind only 2015 and 2005.
Though, the recent updates have shown that the total number of houses vended in Greater Vancouver dropped more than 22 % in December in contrast with the preceding month. President Dan Morrison said that sales might have slowly risen, but the property costs have not dropped significantly.
According to the calculation, made by the real estate board, the benchmark price for apartments has escalated by 27 % from July 2015 to July 2016. On the other hand, the price for townhomes has hiked by 29 percent, which is equal to the upper range from B.C. Assessment. Morrison said that it would take a little while for the market to familiarise with the changes that are taking place, and that the limited supply is the reason for a rise in the prices.
According to Royal LePage, CEO Phil Soper and the latest predictions by real estate groups and financial institutions, the long-awaited corrections required in Vancouver’s inflamed housing market may be just around the corner. It has been forecasted that prices are headed for a double-digit decline in 2017 as the purchasers are dropping out of the housing market.
A report released last month by the B.C. Real Estate Association anticipated an 8.7% fall in housing costs in the area for 2017 with the average MLS value dipping from $1.03 million in 2016 to $940,000 next year. Similarly, in the month of October, the National Bank foretold a 20% drop in the rate of detached houses in Vancouver, a 9% drop for attached houses, and a 5 % decline in the prices of condos.
To these predictions, the economist at University of B.C., Tom Davidoff stated that ‘There’s no question the market is getting buffeted by headwinds.’ He also said that these mid-range conjectures are targeting on a modest correction after months of sinking sales in the Greater Vancouver market.
Besides, for Davidoff, Canada will always remain a prized destination and haven in a tumultuous world. “Having a stable democracy with a beautiful environment, over time, is going to be a real strength of Vancouver,” he said.