The Vancouver housing market continues to show signs of anxiety with only 444 detached homes selling in January and prices down more than six per cent in the past six months. The Real Estate Board of Greater Vancouver said Thursday there were 1,523 sales in January 2017, down from 2,519 sales a year ago and a drop of 11.1 per cent from the 1,714 sales in December. The January sales figures were 10.3 per cent below the 10-year average for the month. Metro Vancouver’s detached properties are thought to be highly sought after by overseas buyers. However, the slower pace of sales, represented a 57.6 per cent decline from a year ago. This leads us to believe that the Vancouver region’s real estate market could be headed for its first year of price declines since 2012 as home sales extend their slide. New principal tax rules surrounding capital gains exemptions could also create further tension within the real estate market. David Rotfleisch, Toronto Tax Lawyer, quotes “If you don’t fall into the non-resident category, your headache will be the new reporting requirements on the sale of property. Not doing this right will open you up to audits and bring the risk of significant penalties.”
As far as prices are concerned, the board said its MLS Home Price Index composite benchmark price for all residential properties in Metro Vancouver was $896,000 in January, a 3.7 per cent decline over the past six months and a 0.2 per cent drop from December, 2016. The falling numbers come as Vancouver continues to deal with the impact of a 15 per cent foreign property transfer tax the province began imposing in August.
“From a real estate perspective, it’s a lukewarm start to the year compared to 2016,” Dan Morrison, president of the board, said in a statement. “While we saw near record-breaking sales at this time last year, home buyers and sellers are more reluctant to engage so far in 2017.”
Supply of new housing units on the other hand appears to be ramping up quickly. The total number of new listings for detached, attached and apartment properties in Metro Vancouver was 4,140 in January, 2017. That figure represented a 6.8 per cent decrease from a year ago but was up 215.5 per cent from December, 2016. The total number of homes listed for sale on the Multiple Listing Service in Metro Vancouver climbed 9.1 per cent over the last year to 7,238 in January, 2017. Total listings jumped 14.1 per cent from the 6,345 listings in December, 2016. The sales-to-active listings ratio of 21 per cent in January, 2017 was 21 per cent, the lowest ratio for the region in two years.
“Analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months,” the board said in a statement.
Morrison said property type is defining activity in the Greater Vancouver market. “The townhome and condominium markets are more active than the detached market at the moment,” Morrison said, adding while detached home prices are falling, townhome and condominium prices are holding steady.