Home sales in Vancouver crashed 39.5% year-over-year in January as only 1,523 homes changed hands, according to the latest data released by the Real Estate Board of Greater Vancouver. The reading marked an 11.1% drop from December.
“From a real estate perspective, it’s a lukewarm start to the year compared to 2016,” Dan Morrison, Real Estate Board of Greater Vancouver (REBGV) president said in the report. “While we saw near record-breaking sales at this time last year, home buyers and sellers are more reluctant to engage so far in 2017.”
Vancouver’s housing market has cooled down dramatically over the past several months after British Columbia introduced a 15% tax on overseas buyers in August in an effort to prick the city’s housing bubble. Even before the tax was introduced, prices had already begun to decline.
However, the drop in home prices seems to be starting to accelerate. Residential home prices for Greater Vancouver fell 1.2% month-over-month in December to a median price of $897,600, according to the MLS Home Price Index. Over the last six months, they are down 2.2%.Despite the recent price drop, prices in the Greater Vancouver area are still higher by 17.89% versus a year ago.
And the pain could just be getting started as foreign buying has evaporated. Luxury foreign buying has plunged 91% drop since July as a result of China cracking down on money flowing out of the country.
It appears we may finally be seeing a mean reversion.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.