Newsletter E-market update
August 22, 2016
August Newsletter 2016
Cooling trend in the Metro Vancouver Region
I think the writing was on the wall. 2016 started out with incredible sales numbers that were not likely to continue forever. There were so many sales in the first half of the year that the demand was bound to slow down. The market needed a breather. We have seen this in past years when the first half of the year accounts for around 70% of the total sales for the year. Myself and all my colleagues are waiting to see if the break is due to the summer arrival or there really is a slowdown in demand. We should know by the end of September.
Total residential sales in July did decrease by 26.7% from June and 18.9% from July 2015. Detached home sales decreased 30.9% from a year ago. Apartment sales decreased 7.3% from a year ago and townhome sales decreased 20.7% from a year ago. Benchmark prices however are up in all categories year to year. If prices are going to start retreating the fall market will be the indicator. Right now I am seeing more sales selling for less than asking price, fewer multiple offers and a wait- and- see attitude amongst buyers. Which leads me to the next topic…
15% tax on foreign buyers. I was in the middle of my summer vacation with all the family on the St. Lawrence River in Brockville, Ontario when I received word of our fair government’s announcement. I call it the “WTF tax”, or “Where’s the foreigner” tax. Very poorly implemented to include every foreign entity with an already signed contract, those foreigners who are legally working here, those who bought a pre-sale years ago and anyone else who doesn’t hold a Canadian passport or permanent residence card. And you only had about 10 days to complete your purchase to avoid the tax? The net result seems to be that the local buyers are now waiting to see what the market will do, expecting prices to drop as foreign buyer demand subsides. The foreign buyers are quite upset with the amount of the tax and are likely to take a few months to digest this new tax, and then decide if it is just part of doing business in Vancouver or take their real estate business elsewhere. With the seasonal slowdown and the new foreign buyer tax it should make for an interesting fall market. Enjoy the remaining days of summer….
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