VANCOUVER—In the past six months, realtors working across Metro Vancouver say they’ve seen market conditions go from highly competitive multiple offers and condo pre-sale lineups, to falling prices and developers offering up to $100,000 “bonuses” in an attempt to lure buyers.

The correction is taking some time to work through the market, but the realtors pinpoint April as the month when conditions began to change. While the single family detached market has been softening for some time — ever since the previous B.C. government introduced a foreign buyer tax in the summer of 2016 — the latest change has affected condos and condo pre-sales, from the very high-end in downtown Vancouver, to mid-range and entry-level product in the suburbs.

It’s a dramatic change from a price run-up in condos that started in the fall of 2016, which also spilled over into a bubbly flipping market for pre-sale condo assignments.

Ian Watt, a realtor with Sothebys, focuses on high-end condos in downtown Vancouver, Yaletown and Coal Harbour. He pegs the price correction in that market at 10 to 15 per cent over the past six months, with very little movement in the highest-priced condos. Steve Saretsky, a realtor with Sutton Group West Coast, estimates Vancouver condo prices have declined four to five per cent since the peak of the market in January 2018.

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Statistics from the Real Estate Board of Greater Vancouver show that Vancouver condo prices have declined 0.3 per cent over the past three months.

“In June and July there has been one sale of a unit above $3.5 million, which is unheard of,” Watt said.

“Usually you’d have five to 10 sales a month, but we’ve only had one in the last six weeks. Everything above $2 million is pretty much dead; anything related to international money is gone right now.”

Prices have also declined for downtown condos in the $600,000 to $700,000 range, Watt said.

In relatively affordable Langley and Abbotsford, where a two-bedroom, two-bathroom townhome goes for between $300,000 and $400,000, it’s a similar story: seven or eight weeks ago, sellers would receive multiple offers. Properties are now sitting on the market for longer, said Tim Sawatzky, a realtor with 2 Percent Realty Valley.

Where it was once common to see lineups to buy condo pre-sales contracts, Sawatzky said developers in Surrey, Langley and Abbotsford are now offering a variety of incentives, such as a $20,000 “furnishing package,” or between $20,000 and $40,000 off the closing price when the building is completed. (When buyers purchase a pre-sale condo contract, they typically pay five to 15 per cent of the price up front and then pay the full amount after the building is completed.)

A client recently sent Saretsky a brochure offering $100,000 off the “developer’s price” at 3755 Chatham, a lowrise condo building planned for Richmond’s Steveston neighbourhood.

In New Westminster, which had a rapid run-up in condo prices in 2017, things have similarly cooled, said Geoff McLennan, a realtor with Re/Max Advantage. It’s meant a less stressful experience for buyers, who are no longer having to compete with many other buyers and make rapid offers without having the time to fully research the property or place conditions on the sale.

At the high end of the market, Watt said the B.C. government’s increased foreign buyer tax, from 15 to 20 per cent, and the Chinese government’s stricter controls on money transfer out of the country, have been factors in that part of the slowdown.

But the realtors peg new federal stress test rules as the main reason the mid-range market has cooled. The tighter restrictions came into effect in January 2018 and mean that even buyers who have a 20 per cent down payment must also meet an additional test to ensure they can afford their mortgage if interest rates rise.

Watt and McLennan say what they’re seeing is not a collapse, but a return to more normal real estate conditions in what’s been a highly overvalued market.

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“My advice to sellers is, it’s not 2017 anymore,” Watt said. “It’s back to reality.”

But as inventory continues to build because of the dramatic drop in sales, a much bigger price correction could be on the way, Saretsky warned.

“Prices are always sticky on the way down,” he said. “Fifty per cent of listings today are recycled,” meaning that the property has been listed, removed, and re-listed, usually with a change in price. “It’s almost like price discovery: what is my home worth.”

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