In the past few months and to date, we are experiencing a layering of things that affect real estate markets – supply chain issues, inflation and interest rate hikes for example.
We currently see tighter movement in the mid-tier of the luxury real estate market, around $6 million to $8 million. The higher ends of $10 million-plus and $20 million-plus continue to see similar levels of activity relative to previous months prior to the interest rate hikes. The properties have to be priced strategically to reflect the current market conditions and in anticipation of how we believe the market will play out.
We are seeing a little slow-down in sales, and this softening will likely continue in the coming months. When new policies are implemented, and also having come off a stellar previous year of (exponential) increase in sales points, it stands to reason that there may be a "wait and see" attitude among purchasers and sellers alike as they try to make sense of a changing market.
Supply and demand are always key factors, and currently, the supply is still low. And the clear fact is that the more expensive a property is, the number of buyers that can afford that property diminishes.
An important note is that the number of days on the market is, to a certain degree, correlated with value and pricing – although it is interesting that you can have an amazing property that you put on the market, and if the right buyer is there, it sells quickly.B.C.'s luxury buyers can come from anywhere, but there are many local buyers.
Of course, as Canada has always had a large immigrant population and is recognized for its diversity, people often want to move to Canada. When they look at where in Canada they want to relocate, B.C. stands out with its scenic natural mountain and water landscape, excellent schools and cultural diversity. Our buyers are coming globally, although most appear to have Canadian citizenship or permanent residency.
(The tax) is an important topic and one we should be paying close attention to, but questions around it are better directed to provincial and federal real estate associations.
We don't anticipate the foreign buyers' tax will affect our luxury property listings, as many buyers we're seeing are from the Lower Mainland, Okanagan and Canada in general.
News from CTV Vancouver Real Estate has been edited for clarity and length.