By Evan Duggan
VANCOUVER, Canada, May 11 (Xinhua) -- After several consecutive years of skyrocketing residential property values, the prices of luxury houses are starting to cool in this West Coast Canadian city.
New figures by real estate firm Royal LePage showed that during the first quarter of 2018, sales of detached luxury homes decreased 38.2 percent compared to the same period in 2017, while sales of luxury condos decreased 26.5 per cent.
In that same period, the median price of a luxury detached home in Greater Vancouver rose 5.2 percent year on year to 5,792,941 Canadian dollars (4,532,967 U.S. dollars), while the median price of a luxury condominium rose seven percent year on year to 2,503,873 Canadian dollars (1,959,280 U.S. dollars) during the same period.
However, price changes tended to lag changes to sales volume, and Royal LePage predicted that by spring 2019, the median price of a luxury detached home in Greater Vancouver would fall by three percent to 5,619,153 Canadian dollars (4,395,751 U.S. dollars) year on year.
Luxury condominiums were forecast to increase by two percent to 2,553,950 Canadian dollars (1,997,840 U.S. dollars) during the same period, the report said.
However, Royal LePage realtor Brock Smeaton said the market was more turbulent than the numbers suggested.
Smeaton conducted his business in the municipality of West Vancouver - one of the region's most luxurious markets.
He said the first four months of this year for house sales in West Vancouver "have been the worst month ever for sales volume".
He said as sales dropped, so did prices.
"There is absolutely no question that the prices are down," he told Xinhua in an interview. "I'm telling you they're down and they're down by more than five percent."
He said the inventory of luxury houses for sale was climbing and sales were dropping. "You don't need to go get a Master's in economics to know that that's going to push prices down whether you're selling eggs or houses."
Transactions in the ultra-luxury market in West Vancouver had ground to a halt, he said. "In West Vancouver, where I work, there are about 50 houses for sale [listed at] over 10 million. There has been one sale the whole year."
Sales in the broader market were also slowing.
Residential property sales of all types in the region totaled 2,579 in April 2018, a 27.4-percent decrease from the 3,553 sales recorded in April 2017, according to the Real Estate Board of Greater Vancouver (REBGV).
Last month's sales were 22.5 percent below the 10-year April sales average, the REBGV said.
The 30-year average for detached-house sales in the region in March was about 1,350 houses, Smeaton said. "This year we had 725. That's a staggering drop."
Smeaton and his firm agreed that several causes were at play in the cooling of the market.
"The region has seen less interest from foreign buyers since China tightened its policies on wealth leaving the country," he said. "More recently, [new] mortgage stress tests and the 2018 British Colombia budget, which contains a speculation tax as well as an increase to the property transfer tax and school tax for all homes over three million Canadian dollars, will significantly affect foreign and domestic buyer activity in 2018."
He said the market had actually been cooling since summer 2016, when the provincial government enacted a 15-percent tax on residential properties bought by foreigners. That tax has since been increased to 20 percent.
"I don't think there's going to be a crash," Smeaton said. Instead, he expected a correction that could be sustained over the next six to eight months.
