November 2, 2016 / 8:42 PM / 2 years ago

Vancouver October home sales slide in wake of foreign buyer tax

VANCOUVER (Reuters) - Vancouver home sales, which have been hit by a tax on foreign buyers, fell for a third consecutive month in October, dropping nearly 40 percent from a year earlier, the city’s real estate board said on Wednesday.

A real estate for sale sign is pictured in front of a home in Vancouver, British Columbia, Canada, September 22, 2016. REUTERS/Ben Nelms

British Columbia province introduced the foreign property transfer tax effective Aug. 2 in an effort to improve affordability in Canada’s most expensive property market.

In a statement, the Real Estate Board of Greater Vancouver said that October’s home sales were 2,233, down 38.8 percent from the year prior though down less than 1 percent from September.

The real estate market has been a contentious topic in Vancouver as many residents and housing advocates complained that foreign buyers, especially from China, were driving up prices and making homes unaffordable for local people. Critics of the tax have said it is unfair to existing property owners and will hurt the economy.

“Changing market conditions compounded by a series of government interventions this year have put home buyers and sellers in a holding pattern,” Dan Morrison, the board’s president, said in a statement. “Potential buyers and sellers are taking a wait-and-see approach to try and better understand what these changes mean for them.”

Sales of detached properties saw the largest decline, falling to 652 in October, a 54.6 percent decrease from the year-ago period. The benchmark price for detached homes was about C$1.55 million ($1.16 million), which was still up 28.9 percent from October 2015, though down 1.4 percent from September.

Attached property sales, meanwhile, plunged 39.5 percent to 403, with benchmark prices at C$669,200 ($499,738.63), still up 25.7 percent from a year ago.

Last month’s new listing count for total detached, attached and apartment properties in the Vancouver region was 3,981, a 3.5 percent decrease from a year ago. It was also 9.5 percent below the region’s 10-year new listing average.

On Friday, data from British Columbia’s finance ministry showed that foreign buyers sharply scaled back buying in the Vancouver region, making up just 1.8 percent of home sales in September from 13.2 percent in the period just before the tax started.

($1 = 1.3391 Canadian dollars)

Reporting by Catherine Ngai; editing by Grant McCool

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