The number of home sales in Vancouver fell 31 percent from the same time last year, according to numbers from the Real Estate Board of Greater Vancouver. The March total, or the 1,727 homes sold that month, has not been this low since 1986.
The city, which sits next to the Pacific Ocean and has long been known for having some of the most expensive real estate in Canada, is undergoing market oversaturation after a period of rapid home value growth.
But the drop in sales also has to do with a shift in regulations — the Canadian city recently introduced new rules that tighten one’s ability to receive a mortgage and require potential buyers to pass a stress test as a way of evaluating one’s ability make mortgage payments.
As a result, Vancouver and its metropolitan area saw a large spike in listings as homes sit on the market in wait of a buyer. There are currently only 12,774 Vancouver homes on the market, 52.4 percent more than last year and 10.2 percent more than last year.
Over the last year, several major real estate companies have made strong efforts to expand into Canada. Zillow, which launched its first Canadian listings in October, partners with several independent brokerages in Vancouver.
Errol Samuelson, Zillow’s chief industry development officer, told Inman that Vancouver remains a lucrative real estate market even despite the current period of stagnation. He cited statistics showing that 88 percent of Vancouverites believe that the city is in a housing bubble that will eventually correct itself.
“It’s no secret that rising home prices and affordability are concerns for many in the Vancouver market,” he said in an emailed statement. “[…] That being said, Vancouver remains a desirable place for many Canadians and non-Canadians to live, but many of the attributes such as proximity to water, mountains and the U.S. border that make the area desirable also make it more difficult to add inventory.”
Meanwhile, Redfin launched in Toronto this February and announced plans to expand to Vancouver by the end of April. The brokerage’s chief economist, Daryl Fairweather, also told Inman that the ebbs and flows of its market will not affect Vancouver’s position as a major real estate destination.
“The combination of the foreign buyer tax, new mortgage stress test and global economic uncertainty have dampened demand and Vancouver sales have tumbled,” Fairweather said in an emailed statement. “Despite the current cool down, Vancouver remains a vibrant, international city with high employment. The long-term outlook is bright.”