Vancouver Home Sales Fall Again, What Does This Mean For Toronto?
Vancouver home sales are down once again.
In a recent report from the Real Estate Board of Greater Vancouver, sales volume for all housing types in Vancouver dipped 34.9 per cent year-over-year.
Just 1,966 homes were sold in the city last month, 23.3 per cent less than the previous month and 26.8 per cent less than the 10-year October sales average. It is also means this October marks the least amount of sales since 2012.
The reason for the drop might be as simple as too many houses being listed on the market. There are currently 12,984 homes listed on the MLS® system in Metro Vancouver — 42.1 per cent more than the previous year.
“For home buyers, this means you have more selection to choose from. For sellers, it means your home may face more competition, from other listings, in the marketplace,” Phil Moore, REBGV president said.
Over the past nine months, year-over-year sales in Vancouver have consistently dropped.
The benchmark price for detached homes fell 5.1 per cent year-over-year and 3.9 per cent over the last three months. Townhomes and condos sales have also been impacted decreasing 37.5 per cent and 35.7 per cent respectively, year-over-year.
So what does this mean for Toronto? According to Zoocasa managing editor Penelope Graham, not much.
“There isn’t anything conclusive as to how Vancouver activity is impacting the Toronto market from a data perspective. However, the B-20 mortgage rules, which were introduced in January, have reduced affordability for buyers in both markets,” said Graham.
This is because the new mortgage rules, which include the stress test for all high- and low-ratio mortgage borrowers, require new and renewing borrowers to satisfy a higher interest rate threshold than they did in the past.
Between these tight mortgage rules and the seemingly ever-increasing interest rate set by the Bank of Canada, affordability will continue to be an issue and will continue to have a negative impact on both city’s real estate sales.