Prices cut in hot markets as sales plunge

Higher-end markets in Vancouver, Richmond see house prices reverse for first time in a more than a year


Detached housing sales have plunged 84% on Vancouver’s west side and are down 88% in Richmond during the first two weeks of August compared to the same period in 2015. Total detached house sales through the Real Estate Board of Greater Vancouver plunged 71% in the same period, with only 169 sales registered compared with 565 in the matching two-week period a year earlier.

The sales slide coincides with the introduction of a new 15% provincial sales tax on foreign home buyers that came into effect August 2, and which may have exasperated a drop in sales that began three months earlier.

According to the Finance Ministry, which began tracking foreign buyers in mid-June, Vancouver’s west side and Richmond had the highest proportion of foreign buyers in Metro Vancouver.

“Single family home sales were already down over 30% in most areas since May,” noted real estate investment analyst Ozzie Jurock in his latest Jurock Insider newsletter this week, adding, “That slowdown was not too surprising when you consider the incredible run up in values.”

However, those incredible price increases have come to a screeching stop in some high-priced neighbourhoods.

Data released to BIV by real estate agents show that, after increasing an average 4% month-over-month for the previous year, benchmark prices fell 1.2% from June to July in Vancouver’s University neighbourhood, to $6.3 million; Point Grey house prices were down 0.8% to $3.7 million; and South Granville house prices dropped 0.1% to $4.1 million. In Dunbar, Kitsilano and South Cambie, benchmark prices for a detached house were virtually unchanged from June to July after increasing an average of 15% in the previous three months.

In Richmond, where foreign buyers account for 10% of housing sales, the benchmark price of a detached house fell in five neighbourhoods and increased just 1% across the municipality in July from a month earlier.

Jurock said it is likely that there will be a sharp increase in listing inventory in the weeks ahead.

“As investors, we need to batten down the hatches,” Jurock told his readers this week.

Zolo Realty BC Inc., a real estate firm that tracks average, rather than benchmark, prices in Vancouver’s housing market, reports that as of August 22, the average home price in the city dropped 17.1% from July 25, to $1.1 million.