VANCOUVER 鈥� Home prices in Metro Vancouver鈥檚 once-surging real estate market are on the cusp of falling, housing experts say, as new figures show another month of plunging home sales in the region.
The Real Estate Board of Greater Vancouver published a report on Tuesday revealing a 32.6聽per cent drop in September home sales compared with the same month last year. That follows a 26 per cent year-over-year decline in August and a dip of about 19 per cent the previous month.
鈥淭his looks like the top of the hump,鈥� said Tom Davidoff, an economist at the University of British Columbia鈥檚 Sauder School of Business.
鈥淭ypically, before prices fall, transaction volumes fall. It looks like that鈥檚 the direction in which we鈥檙e heading.鈥�
Government officials have been scrambling in recent months to cool Vancouver鈥檚 sizzling real- estate market, as surging prices continue to push home ownership further out of reach for the average resident.
Experts are divided on the reasons for the latest decline in sales.
Davidoff attributed the drop in large part to the provincial government鈥檚 15 per cent tax on foreign buyers that came into effect in August.
Signalling that foreign demand will be significantly stifled dampens the incentive locals have to rush into the housing market, he said.
鈥淲hy would you [buy]?鈥� Davidoff asked. 鈥淭he only reason you鈥檇 do it is because you expect prices to grow. Well, if you think the foreign buyer鈥檚 gone, that鈥檚 off the table. So where鈥檚 the demand now?鈥�
Davidoff predicted that housing prices will sink at least 10 per cent over the coming year.
September was the second month the 15 per cent tax applied to non-residents purchasing property in the city.
The real estate board said there were 2,253 homes sold last month, a steep dip from the 3,345 home sales recorded in September 2015.
The drop was felt most acutely among detached homes, where sales declined 47.6 per cent when compared to the same period last year.
Attached-home sales decreased 32.2 per cent while condo sales slipped 20.3 per cent.
Marc Pinsonneault, a senior economist at the National Bank of sa国际传媒, said the impact of the 15聽per cent tax is overstated.
Home sales, when seasonally adjusted, have been dropping every month since February, long before the tax was introduced, he said.
Like Davidoff, he predicted home prices will decline 10 per cent over the coming 12 months, adding that the slide will be felt most intensely at the higher end of the market, and less with condominiums and townhouses.
Andrey Pavlov, a business professor at Simon Fraser University in Vancouver, said the most interesting element of the real estate board鈥檚 report was that the number of sales dropped at the same time as the number of listings rose.
鈥淭his is the first time this has happened,鈥� Pavlov said.
