Greater Vancouver’s record-breaking housing market run appears to be over, with August sales plummeting following a new provincial tax on foreigners.

The Real Estate Board of Greater Vancouver said Friday that existing home sales in the metro area dropped to 2,489 last month from 3,362 a year earlier, a 26% decline. August sales were 10.2% below levels from two years ago and down 1% from three years ago.

From just July to August, sales in Canada’s most expensive city for housing dropped 22.8% — a period that coincides with a provincial announcement on July 25 to slap a 15% additional tax on transaction involving foreign buyers. The new tax went into effect Aug. 2, causing people to rush to beat the deadline but also causing a number of previous agreed to deals to fall apart, according to realtors.

“Sales have been trending downward in Metro Vancouver for a few months. The new foreign buyer tax appears to have added to this trend by reducing foreign buyer activity and causing some uncertainty amongst local home buyers and sellers,” said Dan Morrison, president of the board in a statement. “The record-breaking sales we saw earlier this year were replaced by more historically normal activity throughout July and August. It’ll take some months before we can really understand the impact of the new tax. We’ll be interested to see the government’s next round of foreign buyer data.”

Still, August sales were only 3.5% off the 10-year average for the month.

On the price front, the board said its MLS Home Price Index composite benchmark price for all residential properties in Metro Vancouver was $933,100 last month, a 31.4% increase compared to a year ago. The price was a slight jump from July’s $930,400 price is up 4.9% over the last three months.

“In aggregate, we continue to see an imbalance between supply and demand in most communities. However, we’re also seeing fewer detached sales in the highest price points and fewer detached home sales relative to all residential sales,” Morrison said. “This is causing average sale prices to show a decline in recent months, while benchmark home prices remain virtually unchanged from July.”

The board maintains the average sale price is the “simplest home price measure to explain” but not necessarily the most accurate because it can be skewed by property type, depending on whether sales are in the low-end or high-end of the market.

In terms of supply, new listings for detached, attached and apartment properties reached 4,293 in August, a 0.3% increase from a year ago but an 18.1% drop from July, when 5,241 properties were listed.

The total number of properties listed for sale on the MLS in Metro Vancouver was 8,506 at the end of August, a 21.9% decline from a year ago but a 1.9% increase from the month previous.

By property type, detached home sales plummeted 44.6% in August from a year ago with only 715 houses changing hands last month. The benchmark price for detached properties still increased 35.8% from a year ago to $1,577,300 and 4.2% over the last three months.

Apartment properties sales fell 10.1% in August from a year ago, reaching 1,343 transactions. The benchmark price of an apartment property was up 26.9% last month from a year ago and 6.1% over the last three months.

Vancouver Home Sales Plunge for Second Straight Month in Wake of New Foreign-Buyer Tax Garry Marr | Financail Post