Townhomes are an in-between market, a solution for people who like to have the feel of independent living with the security a strata brings. Since the foreign buyer’s tax was implemented, everyone has been speculating about the impact on Vancouver’s runaway real estate market. According to CBC News, one of the impacts has been a sharp increase in the demand for Vancouver townhouses.
A prospective townhouse buyer interviewed by the CBC describes an open house mobbed by over 30 people. With the new tax in place, some hopeful buyers had thought it would be easier to find a home on the cooling market. Instead, they lost a bidding war when a “1,150-square-foot townhouse in a pretty pocket of East Vancouver went for $70,000 over the asking price at $908,000.”
Representatives of the Greater Vancouver Real Estate Board say the tax seems to have created two distinct markets—one for detached homes and one for condos and townhomes.
While the sale of high-priced detached homes had been slow and soft, the market for attached homes is showing a different trend. Officials indicate that the sales-to-listings ratio for townhomes and condos in Vancouver is hovering around 40 percent—anything over 20 percent typically reflects a seller’s market.
While it’s frustrating for hopeful homeowners, researcher Michael Ferreira with the firm Urban Analytics says the results aren’t surprising.
According to Ferreira, the tax will only impact the top end of the market. In addition, just 16 new townhomes will hit the pre-sale market in Vancouver during what is referred to as the busy fall launch—the time when buyers and sellers are back from summer vacation.
While some experts suggest that current zoning laws that limit the supply of attached homes will continue to impact townhouse buyers, others are certain that the trickledown effect from the 15% tax will help stabilize prices—both for individual lots and townhomes.
If you’re interesting in selling a townhouse and hope to capitalize on the market trend, contact Ariane Benjamin, townhouse specialist at vancouvertownhouse.ca