(Reuters) - Vancouver-area home sales, hit by a tax on foreign buyers, fell for the fifth month in a row in December, dropping nearly 40 percent compared to the same month a year earlier and down almost 23 percent from November, data released on Wednesday showed.
The hardest hit segment in Canada’s most expensive property market was single-family detached homes, where sales slumped 52.4 percent compared with December 2015, according to data from the Real Estate Board of Greater Vancouver.
The benchmark price for detached homes in the picturesque West Coast city was C$1.48 million ($1.11 million) in December, down 1.8 percent on the previous month and 5 percent over six months. Year-over-year, however, the price was up 18.6 percent.
In the upmarket Vancouver West neighborhood, a favorite with foreign buyers, the average price for a single-family detached home was C$3.4 million, down 3 percent in the last six months but up 19 percent over 12 months.
“The supply of homes for sale couldn’t keep up with home buyer demand for much of 2016. This allowed home sellers to raise their asking price,” board president Dan Morrison said in a statement.
“It wasn’t until the last half of the year that prices began to show modest declines,” he said.
For the full year, Vancouver’s housing market had its third-highest selling year on record, the board said, behind only 2015 and 2005 as sales were buoyant in the months before the province of British Columbia implemented a foreign property transfer tax on Aug. 2.
The move to make housing more affordable followed an outcry from many residents and housing advocates that foreigners, especially from China, were buying properties in droves and pushing prices out of locals’ reach.
Foreign purchases of Vancouver-area homes have fallen since the tax took effect. Overseas investors made up 3 percent of home sales in the region in October, well down on the 13.2 percent between June 10 and Aug. 1, the period before the tax took effect.
The provincial government expects foreign property purchases could settle at around 4 to 5 percent of total sales over time.
Reporting by Nicole Mordant in Vancouver; Editing by James Dalgleish