VANCOUVER (Reuters) - In Vancouver, Canada’s most expensive real estate market, sales of homes over C$4 million ($2.84 million) jumped 66.8 percent last year and are set to stay strong in early 2016, buoyed by international demand and limited inventory, according to a study released on Thursday.
The Sotheby’s International Realty report comes just days after British Columbia released its 2016 assessment figures, which showed the value of all properties in Vancouver soared more than 16 percent to a record C$636 billion.
“There’s very little inventory right now, particularly in prime neighborhoods,” said Elaine Hung, spokeswoman for Sotheby’s Canada, noting that the sagging Canadian dollar is helping drive interest from offshore and newcomer buyers.
Sales volumes on houses, condos and townhomes in the C$1 million to C$2 million range jumped 43.3 percent in 2015, while those in the C$2 million to C$4 million range climbed 46.2 percent, Sotheby’s found.
Vancouver’s red-hot housing market has been on a tear for the last decade, driven in part by buoyant foreign interest, leading to backlash from locals who say they are priced out and worry that offshore buyers are not paying their fair share of taxes.
On the assessment side, Vancouver and its suburbs led the double-digit gains, with the total value of homes in exclusive Lions Bay posting the largest year-over-year jump, at 17.96 percent, while Vancouver soared 16.84 percent.
“It does add more fuel to the fire about wanting to deal with foreign investment and whether or not current residents are bearing the brunt of cost for our future residents,” said Jordan Bateman, British Columbia director for the Canadian Taxpayers Federation.
Vancouver Mayor Gregor Robertson again called for a speculation tax to slow flipping activity and a luxury tax on wealthy buyers.
Province-wide, assessed values climbed 11.1 percent, or by C$130 billion, the largest year-over-year gain since the 2008 financial crisis, according to provincial data.
Facing backlash over the impact of higher assessments on property taxes, British Columbia announced on Tuesday it would boost the threshold for a tax break to lower-income homeowners to C$1.2 million from C$1.1 million.
Nearly 10 percent of homes in the province are now worth more than C$1.2 million. At the same time, the median income for a family in British Columbia was C$74,150 in 2013, the last available year, according to Statistics Canada.
($1 = 1.4074 Canadian dollars)
Reporting by Julie Gordon and Nicole Mordant; Editing by Leslie Adler