Sales of luxury homes in the $4 million-or-higher category in Vancouver increased 36% year-over-year in 2016, according to a Sotheby’s International Realty Canada report released January 11, but the jump was solely attributable to sales in the first half of the year.
A total of 573 homes in this price range were sold in the year. Between January and June, 439 units changed hands, which is almost double the 219 units sold in the same period in 2015. By the last half of 2016, however, sales fell to 134 units – down 34% compared with the last six months of 2015.
While sales of homes in the highest price category grew, sales of homes between $1 million and $4 million fell. Unit sales of homes between $1 million and $2 million declined 4% year-over-year, and those between $2 million and $4 million dropped 6%. In both of those categories, strong sales in the first half of the year were offset by a weak second half.
“Affordability amidst rising housing costs remained a critical challenge throughout the year and is expected to remain a defining factor shaping the top-tier real estate market into 2017,” Sotheby’s said in its report.
“With the benchmark price of single-family homes exceeding $1,473,900 in Vancouver East and $3,521,000 in Vancouver West, buyers priced out of single family homes increasingly moved to attached homes and condominiums, perpetuating demand for both housing types even as the market moderated.”
The drop in sales in the last six months of 2016 was driven in part by measures introduced last year by municipal, provincial and federal governments that were intended to cool the real estate market in Vancouver and other areas. These measures “contributed to a ‘wait and see’ attitude among both sellers and buyers, calming sales activity in the top-tier market,” Sotheby’s said in its report.
Sothebys said Vancouver had the fastest growing sales in the country over the past two years, and this is expected to continue in spite of the cooling market.
“Despite growing concerns of a real estate bubble, the $1 million-plus real estate market in Vancouver is expected to maintain stability into the first quarter of 2017, even as it returns to more normalized levels,” the report said.
“A projected 3.9% increase in employment would lead to the strongest gains since 1994,” the report said. “Net migration and a strong labour market will continue to bolster both demand and consumer confidence in Vancouver.”
$4 million-plus sales increased for both condos and attached homes
Sales of condos worth $4 million and higher increased 53% (to a total of 49 units) in 2016 overall. This was due to a strong first half of the year in which 32 units in this price range were sold, which was a 191% increase compared with 11 units in the January-to-June period of 2015. In the last half of the year, 17 units were sold, which is down 19% compared with 21 units sold in the same period last year.
For attached homes worth over $4 million, a total of 520 units were sold in the year, compared with 388 units in 2015. This was again due to strong sales in the first six months of the year; 403 units changed hands in this period, up 96% compared with 206 homes between January and June of 2015.
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