Party’s over for Vancouver’s luxury property market — it’s now the worst performer on the continent
The party’s over for now for those sitting on Vancouver’s most expensive properties.
Prices at the top end of the market plunged 7.6 per cent in the six months to March, making it the world’s second-worst performer during that period, according to the latest global survey of prime properties by Knight Frank LLP. Only Stockholm did worse, falling 9 per cent, while Toronto rose 6 per cent and the top gainer was Seoul.
The findings — based on the top 5 per cent of the housing market in each city — lend support to anecdotal evidence of a slowdown in Vancouver’s luxury segment following the hike of a tax on foreign buyers to 20 per cent from 15 per cent in February, the introduction of a speculation tax, and rising interest rates.
Vancouver’s slower rate of growth is likely the outcome of British Columbia’s “macro prudential measures” and the rising borrowing costs for investors, said Kate Everett-Allen, Knight Frank’s head of international residential research, in an emailed response to questions. In Vancouver, the study looked at properties starting at about $3.5 million (US$2.7 million), she said.
Just two years earlier, Vancouver had topped global rankings in the same survey after surging 26 per cent over a 12-month period and before the provincial government first imposed a foreign buyers’ tax in August 2016.
At the height of the market, foreign money had flowed mostly into the million-dollar-plus segment of detached homes, according to Adil Dinani, a realtor with Royal LePage, a unit of Brookfield Real Estate Services Inc.
“Those capital flows have shifted now,” Dinani said. “It’s actually refreshing — you have some time to breathe, to negotiate like a regular transaction.”