Vancouver Home Prices Resume Stubborn Climb to Fresh RecordBy and
Detached homes in Canada’s No. 2 market average C$1.83 million
Total sales fell 8.5% but still 3rd-strongest May on record
Vancouver home prices climbed back to a record in May, suggesting the impact of a foreign-buyer tax imposed last year is fading.
Benchmark prices in the west coast city reached a record C$967,500 ($716,300), up 8.8 percent from a year earlier, the Real Estate Board of Greater Vancouver said Friday. Average prices for single detached homes hit C$1.831 million, the most ever.
It’s an indication of how stubborn gains have been in Canada’s biggest real estate markets. Not even a cash-crunch at Toronto mortgage lender Home Capital Group Inc., a succession of government tightening measures or warnings about how price gains are detached from economic fundamentals have had a sustained cooling effect. Comparable data for Toronto housing is due Monday.
The number of homes sold was the third-highest on record for the month of May at 4,364 transactions, and 24 percent above the 10-year average, the Vancouver realtor group said. Sales of the more expensive detached homes fell 17 percent from a year earlier while for attached properties they rose 4.9 percent, possibly reflecting a greater reluctance among home buyers to take on large mortgages in the face of rising interest rates in the U.S.
While total sales fell 8.5 percent from a year earlier, the decline was far less than January’s 40 percent drop.
Bidding wars on million-dollar Vancouver homes led the British Columbia government to fix a 15 percent foreign buyer tax in August, and since then economists have questioned how long the levy would work to cool the market. Toronto introduced its own foreign buyer tax this year and the International Monetary Fund said this week more could be done to prevent a dangerous unwinding of prices amid bloated consumer debt levels.
The previous peak for detached homes was C$1.827 million in January 2016.