Posted in Real Estate, Statistics |

WD-40

Our government has fiddled and the Vancouver Real Estate Market is burning. Regardless of where you sit at the Tax argument table what is certain is that the 15% Foreign National Tax attributed to property purchases has clearly disrupted the Vancouver real estate market. Absolute is that WD-40 will not kill the fire nor stop the squeak in this government authored intervention.

Average Price 1977 – 2016

Vancouver Real Estate Average Numbers

Detached Attached Apartment August 16 – $1,470,265 0% August 16 – $730,189 +18% August 16 – $528,808 + 1% August 15 – $1,474,475 August 15 – $615,557 August 15 – $521,666

Vancouver Real Estate Inventory – Active Listings

Detached Attached Apartment August 16 – 4,963 +10% August 16 – 1,062 -26% August 16 – 2,481 -50% August 15 – 4,478 August 15 – 1,383 August 15 – 5,036

Vancouver Real Estate – Units Sold

Detached Attached Apartment August 16 – 722 -44% August 16 – 431 -25% August 16 – 1,343 -10% August 15 – 1,301 August 15 – 578 August 15 – 1,494

Yattermatters – Average Price August 2016

*Percentage = YOY

Chaos

In July 2016 the average price for a Vancouver detached was recorded at $1,764,682. In less than a month (post Tax proclamation), the average price gain over the year of approximately $300,000 has been wiped out. August 2016`s average price for a detached home flat lined at $1,470,265 to settle below August 2015`s average price of $1,474,475.

While that price drop is worrisome more critical is that the number of sales has tanked to 44% below August 2015. Price is one thing but when there are no sales you don’t have a market. A certainty rests in this dramatic lack of sales. Should it continue future market predictions become more tenuous than ever. More curious will be the evolution that is about to take place. What will be the result from the multiplier effect of this drop in price and sales?

The chaos created by our government fiddle playing will I suspect, continue for the next months ahead. At some point it may become clear that elements beyond the currently perceived influence of foreign buyers could have played a greater part in determining the market place.

The outfall of this new tax is yet to be fully realized. Real Estate in Vancouver directly and indirectly generates cash flow to many ancillary businesses. This government intervention which supposedly was designed to “clean and protect” may well start a impenetrable rust in the economy – a reaction neither envisioned or hoped for that could render the ability to purchase a Vancouver home more difficult.