Halloween might be over, but that is not the reason buyers have been spooked from entering the once red-hot housing market in and around Vancouver. The decade-long period of record growth of the housing market appears to have come to a screeching halt.
Year over year sales numbers are down well over 30%. Although numbers began to slip earlier in spring, many are blaming the new 15% tax that the government is imposing on foreign real estate buyers. This comes at the same time the government closed a loophole that allowed some foreign non-residents to receive a tax break on the sale of property.
Vancouver is one of the top cities most at risk for a housing bubble collapse is now seeing inventory grow as out of country money has slowed dramatically, and local buyers are sitting back and waiting to see how the situation plays out.
It would seem that the days of buyers buying without an inspection and sellers collecting generous cash offers are a thing of the past. Homes were easily selling a 15% over their market value this summer are now seeing their sales prices plummet to 10% below the appraised value.
Changes in the real estate market do seem to play out slower than in other traditional markets, so the actual impact of these price changes are still unclear. One thing is sure, the risk of a substantial price correction seems to be eminent.