There is genuine panic among a large section of homeowners in Vancouver as sales have fallen to their lowest level since 1986.
Only 1,727 homes changed hands in Greater Vancouver in March, down 31.4 per cent from the same month a year earlier, the Real Estate Board of Greater Vancouver said Tuesday.
Prices for all housing types are falling. The benchmark price of a detached home clocked in at $1.437 million, down 10.5 per cent, or about $170,000, in a year.
Condo prices are down 5.9 per cent in a year, to $656,900.
Real estate agents and brokers blame British Columbia’s provincial government for this state of affairs by introducing a foreign buyers’ tax in mid-2016, in response to rapidly growing house prices. It was bumped up to 20 per cent, from 15 per cent, last year.
The city has also seen the introduction of a vacant home tax.
Another major factor is the federal mortgage stress test, which reduced the maximum amount a borrower can take out on a mortgage by about 20 per cent, as well as by rising mortgage rates over the past year-and-a-half.
But this is really a Catch-22 situation. Before all these measures brought down the cost of housing in Vancouver, few could afford to buy or rent given the astronomical cost of buying homes.
Vacancies was a big issue given that many foreign buyers were investing in real estate and then locking up their homes for years until they changed hands.
Doing away with these measures that has brought down prices won’t solve the problem of affordability or housing because prices will simply start to climb again. -CINEWS