Vancouver's luxury recovery to be largely driven by domestic buyers

Vancouver's luxury recovery to be largely driven by domestic buyers

Vancouver

Domestic buyers are likely to pick up the slack left behind by wealthy Chinese, whose contributions in Vancouver’s luxury market have slowed down significantly over the past year.

In its “Canadian Year-End Luxury Real Estate Report”, global high-end real estate brand Engel & Völkers stated that as a whole, 2019 was relatively staid for Vancouver.

“The market continued as balanced, but the number of sales remained slow and prices saw a decline. The second half of 2019 saw a rapid change in sales volume primarily from the local market and an uptick in interest from Hong Kong due to recent unrest in the region,” Engel & Völkers noted.

Dynamism was mainly seen in the low- and mid-end segments, with the high-end housing market continuing to labour under several provincial policies and levies aimed at foreign owners.

“As a result, international buyers from regions like China — previously a primary driver in Vancouver’s luxury market — has slowed significantly,” Engel & Völkers explained.

“Optimistically, with the resurrection of the local market, Engel & Völkers anticipates prices will see an increase of 4% to 7% in 2020.”

Latest market analyses by Sotheby’s International Realty Canada indicated that Vancouver, along with Toronto, posted the strongest recovery among the nation’s top-tier housing markets in 2019.

“The return of confidence to the $1 million-plus real estate market in Vancouver was a welcome departure from the regulatory concerns and uncertainty that plagued the market over the past few years,” Sotheby’s said.

“Overall $1 million-plus residential real estate sales in Vancouver were down 6% in 2019 from 2018 levels, while sales over $4 million declined 25%. However, activity in the last half of 2019 reflected a strengthening top-tier market as sales over $1 million increased 37% year-over-year, led by gains in the city’s single family and attached home segments.”