National sales numbers last month weakened by 3.1 per cent from July, while Vancouver transactions fell by 18.8 per cent in the same period. The figures came in the wake of the B.C. government’s implementation of a 15 per cent tax on foreign home buyers, Bloomberg
CREA further predicted that B.C.’s new levy will lead to a 4 per cent decline in sales activity by next year, an assessment that has been backed by market observers.
“We expect some of the extreme weakness in August to be reversed in the coming months as the shock of the new land transfer tax on foreign buyers dissipates,” Toronto-Dominion Bank economist Diana Petramala wrote in a research note.
“Nonetheless, we expect the market to remain weak at least through early-2017.”
Meanwhile, the average home price in Vancouver dropped from C$1.04 million in July to C$846,244 in August. Despite the decline, the median cost of a residential property in Vancouver is still nearly twice as high as the national average of C$473,105.
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In its latest report, the Canadian Real Estate Association (CREA) announced that Canadian home sales fell for the 4th consecutive month in August, with the Greater Vancouver area seeing the greatest decline.