Photo: Craig Paterson/Flickr
Metro Vancouver home sales continued to drop on a year-over-year basis in March, and one of Canada’s biggest banks says BC’s new property taxes are likely to blame.
Last month, home sales plummeted roughly 30 per cent compared to a year ago, according to the latest data from the Real Estate Board of Greater Vancouver (REBGV).
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But RBC Senior Economist Robert Hogue says the region’s sales decline is not surprising considering resales had already dropped notably in January and February — most likely as a result of a national mortgage stress test that came into effect on January 1.
Hogue says sales activity dropped to even lower levels in March.
“Yet the new stress test may not have been the main reason for the further weakening in home resales in the Vancouver area,” he writes in a note, published Thursday.
“The situation got more challenging there after the BC provincial budget at the end of February announced a new round of market-cooling measures,” Hogue adds.
The BC government’s housing plan includes an increase to the existing foreign-buyer tax from 15 per cent to 20 per cent, along with a new speculation tax.
Although stricter mortgage regulations played a role in the region’s drop in sales throughout Q1 2018, Hogue attributes the further slowdown in March to the new housing policies.
“It’s highly probable that some buyers and sellers moved to the sidelines in March in reaction to the uncertainty caused by these measures — just as many did in the months following the introduction of the original foreign-buyer tax in August 2016,” writes Hogue.
Meantime, new listings for all properties fell nearly 7 per cent in March to 4,450 homes compared to 4,762 homes in March 2017.
Despite dampened sales and listings last month, Hogue notes that demand-supply conditions have recently become balanced in Metro Vancouver, resulting in more upward pressure on prices.
In March, the benchmark price of a home was $1,084,000 — a 16 per cent increase from a year ago and up one per cent compared to February 2018.