Detached homes in the $5 million-plus “luxury” range to see steep price drop this year, while $3 million-plus condo values will decline to a lesser degree, predicts brokerage
Metro Vancouver’s luxury detached homes will see a further median price decline of 7.1 per cent over the next year, according to a forecast issued February 21 by Royal LePage.
The national real estate brokerage’s 2019 Royal LePage Luxury Properties Report, which assesses high-end homes in five major cities across Canada, said that the sale price of the median “luxury” home in Metro Vancouver between February 1, 2018 and January 31, 2019 was $5,751,928, which is a decline of 1.7 per cent from the previous year.
The report predicted that this price would decline a further 7.1 per cent over the 12 months to January 31, 2020, to a median sale price of $5,341,936. That’s a loss of around $210,000.
Government measures to reduce overseas buyer demand and cool the housing market were seen as partly responsible for this decline. The report authors wrote, “Across Canada's five largest cities, Greater Vancouver was the only city to post a decline in median luxury home prices. The number of luxury houses trading hands declined over the past two years, a trend that initially began with the introduction of measures to cool the city's real estate market in 2016. Luxury home values have dipped but remain remarkably steady as many Vancouverites refuse to sell at what they perceive as a discount. Exasperating soft demand, Chinese nationals, an important luxury buyer demographic, have seen restrictions placed on their ability to transfer wealth to Canada.”
Brock Smeaton, sales representative, Royal LePage Sussex, said, “We have a growing number of buyers sitting on the sidelines watching prices, but they are also concerned about the unpredictability of government regulation and whether right now is the best time to buy.”
In Metro Vancouver’s luxury condo sector, Royal LePage predicted a median sale price decline of 3.7 per cent over the next year, from $2,680,064 to $2,580,115. This follows a 0.6 per cent price slide over the past year.
“Luxury properties in Greater Vancouver are softening in price, but the lower-end luxury market is faring better than the upper end," added Smeaton. “For buyers considering the city’s most luxurious properties, it is a great time to buy in terms of price and selection.”
Despite the price declines – or perhaps because of them – Royal LePage is expecting a recovery in luxury-home market activity over the coming year. “Compared to last year, we are expecting an increase in luxury sales activity in Greater Vancouver,” said Kevin Somers, chief operating officer, Royal LePage Real Estate Services. “Price reductions and increased selection in Greater Vancouver are expected to stimulate the luxury property market.”