In October, Vancouver experienced for the first time in eight months a drop in housing prices. But that was not the only reason for Vancouver to be pleased about. There was also drop in the building of contemporary homes.
The British Columbia market saw a fall in a statistics released by Canada Mortgage and Housing Corporation. This good news comes after several laws were made to tighten mortgage rules and taxes on foreign investors. These new rules which came into effect in October is considered to be the driving force behind the housing price reduction.
A 38.8% drop was seen in Greater Vancouver market prices.
Vancouver which had its highest housing prices at 50,000 had actually dropped to 27,600 in October. This figure goes to show that there is indeed change occurring in the housing market after several months of it being at a constant high rate.
Housing inventory is one of the main determining factors that can be used to assess the monthly housing status. However the cooling in the housing prices, actually began in October but there was a slight mix-up in the figures which highlighted September as the period when the cooling first began.
According to Robyn Adamache, principle market analyst for Vancouver stated that “the overall housing inventory began in October as a result of a drop in apartment sales. The main focus of constructors presently is on existing projects already underway.”
The Canadian Mortgage and Housing Corporation stated that in the overall real estate market, the housing inventory was 199,920 units in October which rose from 199,262. The independent figure for October was 192,928 units lower than that of September which was 219,363 units.
Dina Ignjatovic, an economist with Toronto-Dominion Bank debated that, the new law introduced to put the pricing situation under control is paying off well with a reduction in housing prices seen in October. He also suggests that the laws should also cover homebuilding activities and also hopes that a drop in housing inventory will be evident in British Columbia and Ontario for the coming year.
Other economists are also anticipating an extra affordability condition in markets which will hold down home resale demand while the new policies will control to have their impact on the housing prices.