Vancouver homes sales dropped to a three-decade low in March just as Redfin and Zillow began to invest in the bustling British Columbia city and Canada at large.

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.”

Email Veronika Bondarenko

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription