B.C. home sales activity declined 14.1% in July thanks to the HST, according to the Canadian Real Estate Association (CREA).
The trend was expected, said the association, given that many buyers chose to ink deals before the new tax was introduced.
“The soft sales figures we’re seeing right now can be attributed in part to accelerated home purchases earlier in the year,” explained CREA president Georges Pahud. “Activity may remain at lower levels for some time, but ultimately we expect a more stable market to emerge, with demand coming back into line with economic fundamentals.”
Sales activity via Multiple Listing Service (MLS) systems across Canada was down 6.8% in July month-over-month.
The decline was actually smaller than the previous two months, according to the CREA, as July sales in Quebec and the Prairies were approximately the same as in June.
The sales decline in B.C. and an 8% decline in Ontario, where HST was also implemented, accounted for 85% of July’s change in national activity.
Meanwhile, new sales listings continue to adjust to lower demand across the country, said the CREA.
In July, new residential listings on Canadian MLS systems dropped 7.2% when compared with the month before.
The association said it was the third consecutive month-over-month decrease and the steepest decline in more than a decade.
Since April, new listings have fallen 17.5% across Canada, but the CREA believes that could help maintain the balance between supply and demand and mitigate erratic home prices.
Earlier this month BIV Daily reported a steep decline in Metro Vancouver home sales in July.