National home sales have declined for the fourth straight month, according to the Canadian Real Estate Association.
On a national level, sales fell 3.1% month-over-month in August. However, they were up 10.2% year-over-year.
Sales were down in 60% of the country’s markets, with the Greater Vancouver Area showing the most precipitous decline.
“The sudden introduction of the new property transfer tax on homes purchased by foreign buyers in Metro Vancouver has created a cloud of uncertainty among home buyers and sellers,” CREA President Cliff Iverson said. “That the tax applies to sales that had not yet closed shows how the details for a new tax policy can unnecessarily destabilize housing markets. More broadly, it speaks to the importance of evidence-based decision making to ensure that unintended consequences and collateral damage are minimized when new policies or tighter regulations affecting housing markets are being actively considered.”
Last month was the sixth month in a row sales declined in the Lower Mainland in B.C.
Again, CREA blames the newly-enacted foreign sales tax.
“Single family homes sales were already cooling before the new land transfer tax on foreign home buyers in Metro Vancouver came into effect,” Gregory Klump, CREA’s chief economist, said. “The surprise announcement of the new tax caused sales to brake hard.”
On the price side, August marked the seventh consecutive month of year-over-year price growth.
“Two-storey single family home prices posted a 16.3 percent year-over-year increase in August 2016, as did townhouse/row units,” CREA said in the release. “One-storey single family homes followed close behind with a y-o-y increase of 14.4 percent, while apartment unit prices rose 11.7 percent y-o-y.”