Drastic changes such as the B.C. government’s 15 per cent tax on foreign buyers have led to significant declines in home sales numbers, sparking worries that a major price correction is imminent.
“Some [sellers] are fearful,” Vancouver-area agent James Garbutt told Global News
“When you compare it to the peak of the madness in April, we’re off — for certain products — by about 20 per cent.”
Among the segments suffering the most from the recent changes are luxury and investment properties, Garbutt said.
“The homes that were inflated the most, got the most attention and climbed the most at the peak of spring, are also the ones starting to get hit the most.”
In addition, recent revisions to federal mortgage rules—intended to moderate the country’s most overheated markets—might instead lead to dramatic increases in mortgage rates, prompting owners to exit ownership while the getting is still good.
“One client purchased a home for $440,000 one year ago, sold it for just over $600,000 this year without putting barely any money into it,” Durham Region agent Rich Gordon said. “They did pretty well.”
However, in a report released mid-October, Moody’s Analytics assured that while the Canadian real estate sector will experience a more relaxed pace in home price growth over the next half decade, rumors of a massive crash are greatly exaggerated.
“There has been a lot of speculation about Canada’s housing markets overheating during the past two years,” Moody’s economist Andres Carbacho-Burgos said in the report.
“The house price outlook calls for a deceleration of house price growth, not for a serious decline, though there are exceptions for smaller regions,” the analyst added.
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Fearing a major crash in the near future, home owners in Canada’s hottest real estate markets are starting to sell off their assets in droves.