More foreigners have chosen to purchase residential property in Richmond than any other municipality in B.C., including Vancouver, since a 15 per cent sales tax was introduced last August.
According to the B.C. Ministry of Finance, foreign buyers continued to rebound in the city in November, as 68 such transactions took place, with an average sale price of $754,000.
By comparison, Vancouver saw 51 transactions, with an average price of $1.63 million.
In November, Richmond sales to foreign buyers accounted for $6.1 million in new tax revenue, while Vancouver sales accounted for $10.1 million. Since the introduction of the tax, the government has raised $49 million, earmarked for affordable housing projects.
As the months go on, foreigners appear to be slowly returning to the market. Prior to August, foreigners were involved in 24.7 per cent of all such transactions in Richmond. That dropped to 1.9 per cent in August, then 4.4 per cent in September, 6.7 per cent in October and now 7.7 per cent in November.
While sales have cooled considerably, prices have merely mellowed.
According to the Real Estate Board of Greater Vancouver (REBGV), benchmark prices for detached homes in Richmond declined 1.8 per cent in December and 6.2 per cent over the past three months. While they peaked in price last year at $1.72 million, they are now priced, on average, at $1.58 million. There were 59 sales overall, last month, but 177 in December, 2015.
“The supply of homes for sale couldn’t keep up with home buyer demand for much of 2016. This allowed home sellers to raise their asking price. It wasn’t until the last half of the year that prices began to show modest declines,” said Dan Morrison, REBGV president.
Townhouses prices in Richmond have not changed in the past three months. The average townhouse unit now costs $721,300. Meanwhile, apartment benchmark prices have risen 3.2 per cent.
“As prices rose in the first half of the year, public debate waged about what was fuelling demand and what should be done to stop it. This led to multiple government interventions into the market. The long-term effects of these actions won’t be fully understood for some time,” concluded Morrison.
