Sales of Vancouver homes over $4 million plummeted in 2018 by 49 per cent year over, according to a report by Sotheby’s International Realty Canada, released January 9.
The luxury real estate brokerage said in its 2018 Top-Tier Real Estate Year-End Report, “In the City of Vancouver, a barrage of government and regulatory interventions compounded by gradual mortgage rate hikes took their toll on top-tier real estate sales.”
Resale transactions on Vancouver homes over $1 million fell by 26 per cent in 2018, with the slowdown more heavily weighted toward the second half of the year, said the brokerage. This was the third consecutive year of a decline in “top-tier” home sales over $1 million.
In the single-family home sector alone, the annual sales declines were even deeper, down 35 per cent among $1 million-plus homes and 51 per cent among $4 million-plus homes.
High-end condos in the City of Vancouver fared somewhat better but still “gave in to market stressors” in the latter half of the year, said Sotheby’s. Sales on condos over $1 million fell by 14 per cent year over year.
The report authors wrote, “A climate of uncertainty thwarted the absorption of rising top-tier housing supply as homebuyers withdrew from the market in hopes of a deeper correction, while demotivated sellers hesitated to price listings appropriately for market conditions.”
Sotheby’s said that, even though benchmark home prices have slipped in the City of Vancouver, affordability had not noticeably improved.
“In spite of the barrage of taxes and policies introduced in 2018 and years previous, housing affordability remained a grave concern. While the composite benchmark price for all residential properties in Vancouver West and Vancouver East dipped to $1,280,000 and $1,056,000 in November 2018 housing prices remained out of reach for many. Along with this, the January 2018 introduction of stricter mortgage lending rules and rising mortgage rates negatively impacted buying power and continued to restrict the dream of homeownership in the city. Although a slowdown of activity by international purchasers was noted in the $4 million-plus luxury market with the introduction of new taxes aimed at deterring speculation and foreign investment, the overall effect on housing affordability was negligible.”
In its national summary, Sotheby’s said that top-tier real estate in eastern Canadian cities was performing much better than western cities, with Montreal setting new records for $1 million-plus sales, and Toronto seeing increased sales in 2018 after a dip the previous year.