The April sales numbers are out and it is clear government interventions are having an effect; exactly what effect, though, is not clear.
In Vancouver the 15% foreign buyers tax appears to have hit the detached single family segment the hardest, for now. Prices are down about 4% since the tax was implemented in August. The decline is led by the luxury end of this segment which has seen prices dip almost 3% since August. Still, the benchmark price for all home types was up 11.4% compared to a year ago.
What the luxury market lost, the condo market appears to have gained. The benchmark price for a condo jumped 16.6% y/y and more than 8% in the past 3 months. The real estate board says the tight supply of entry level and “missing middle” housing means prices are likely to keep climbing even as sales volumes slide.
In Toronto year-over-year prices blasted-up another 31.7% in April. New rules to cool the market, being put in place by the Ontario government, had been laid-out just 10 days before the end of the month, but had been telegraphed well in advance.
Toronto also saw a 34% surge in new listings – a pleasant relief from the tight supply that has been plaguing the city. But market watchers are divided on whether the government’s new rules triggered the increase, or whether sellers have simply decided to cash-in on double-digit price increases experienced over the past year.