East Vancouver Real Estate Market Update Blog – August 2016
Hello WeLoveEastVan.com readers and welcome to August, the month filled with sun, sand, my birthday and surprises from the Government!
That additional 15% Property Transfer Tax for foreigners (i.e. not citizens or permanent residents) came as quite the surprise to everyone, especially Buyers who had already secured a firm contract to purchase in this hectic market, who would unfortunately be subjected to be tax upon the completion of the sale. I had a set of Buyers who successfully moved up the completion date to before the tax was implemented since the additional tax wasn’t something they could have afforded, but any further ramifications from the tax remain to be seen. Will this decrease the number of foreign buyers? Will this make a difference to prices? Will the snowball effect of some incomplete deals leave other Buyers and Sellers scrambling? Will the amount of listings available increase?
The big question – How will this affect the market?? Various neighbourhoods and price points may attract foreign Buyers (and investors) more than others. The pre-sale market will be interesting to follow, though depending on the completion date of constructions, Buyers will have a little while to decide what to do and/or raise a little more money needed for the purchase.
At the end of the day, I don’t think this will have a direct effect on the market, but I’ve heard from a handful of Buyers that they’ll now be putting their search on hold to see how this 15% tax will affect the market, which ironically affects the market! If most Buyers go with this mentality, along with ambitious pricing from Sellers, we could see properties sitting on the market a lot longer than we’ve seen lately. Having said that, there are still a lot of Buyers eager to buy, and with less competition on the market, it might give some of these Buyers an advantage that they haven’t had in awhile.
The stats we’ll present in this review are based on July’s numbers, which was before the announcement. We’ll have to follow the issue for the next few months to get a sense of the full effect.
Onto the numbers – we’re starting to see slight changes to the market. Nothing drastic, just a sense that the activity is going back to a range that makes a little more sense. Condos saw a drop in average price to just over $500,000, with a 75% sales to active ratio – still incredibly strong, but it’s been decreasing from the year’s 98% high. Townhouses saw an increase in average price to $850k with a sales to active ratio of 59%. The detached house market saw a slight increase in average price to a whopping $1,708,005 with a 20% sales to active ratio with more listings now than at any point in the last two years.
(Green is Detached Houses, Blue is Townhouses, Orange is Condos)
Sales to Active Ratio:
*** Keep in mind that a balances market is between 0.15 and 0.20
Average Sales Price:
Give us a call to chat about how the current market affects you – the properties you want to sell and the properties you want to buy. Marketing, negotiation and skill in navigating this market will make a big difference in the coming months, so you want to make sure that you’re working with a great team with a proven success record (that’s us!).
As things slow down in the summer, it’s a great time to connect with mortgage brokers and realtors to ensure you’ve asked the preliminary questions and have the pre-approvals necessary to get started.
Enjoy the sun!