Vancouver’s real estate market is nothing like the average Canadian city’s. It exists in a state of flux, going from one extreme valuation to another. Rental rates are soaring and certain vacancies hover around 0%.
Their luxury property market, however, has seen better days.
Global real estate firm Knight Frank released a new report ranking luxury property markets worldwide. Two years ago, Vancouver placed in the top spot on the company’s global luxury scale, but today, the West Coast city placed dead last.
Knight Frank’s prime cities residential index for 2018’s third quarter places Vancity 43rd out of 43, citing a drop in luxury real estate prices totalling 11.3% over this year. Toronto, in comparison, ranked 7th out of the 43 worldwide cities, as property values grew 8.5% over the same time period.
Singapore nabbed first place, seeing 13.1% growth.
“Vancouver, however, sits at the bottom of our rankings as upmarket areas such as West Vancouver have seen a marked slowdown in sales and prices as a result of the raft of measures introduced in February’s (provincial) budget.”
Keep in mind, this index just looks at luxury housing. Looking at the broader picture that includes every housing possibility, Vancouver and Toronto actually reverse roles.
In Knight Frank’s assessment of overall housing markets around the world, Vancouver places 10th on the list while Toronto dropped dramatically to 137th place out of 150, also experiencing a fall from #1.
Vancouver’s luxury drop could be attributed to market stagnancy. Housing data from the city’s real estate board showed sales dropped 43.5% in September over the past year. Further, homes are staying on the market longer and depreciating based on the ample supply. Today there are 38% more homes for sale than a year ago.
Similarly, luxury markets in Sydney and Hong Kong have also experienced market slowdowns after flying high for a sustained period.
Vancouver’s recent policy changes have hit their real estate market hard. A foreign buyer’s tax in 2016 reduced demand from abroad while new housing taxes introduced this year limited new buyers. New mortgage rules also reduced the amount of money prospective homebuyers could borrow by 20%.