Vancouver home sales down 26 percent after foreign ownership tax

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TORONTO (Reuters) – Home sales in the Vancouver region’s heated housing market fell 26 percent in August on a year-to-year basis after the province introduced a tax on foreign home ownership, the Real Estate Board of Greater Vancouver (REBGV) said on Friday.

In a statement, the board said August sales totaled 2,489, down from 3,362 in the same month last year. That decrease followed a 19 percent year-to-year decline for sales in July.

British Columbia introduced a 15 percent tax on foreign real estate buyers in Vancouver in late July, a measure geared at increasing housing affordability.

A benchmark of home prices in the Vancouver area jumped 32 percent over one year to hit C$917,800 ($705,967) in June. Foreign buyers have taken the brunt of the blame for the runaway market, though factors like low interest rates also play a role.

The home price benchmark gained slightly to C$933,100 in August, a 4.9 percent increase over the last three months, according to the board.

“The record-breaking sales we saw earlier this year were replaced by more historically normal activity throughout July and August,” REBGV President Dan Morrison said in the statement.

“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.”

(Reporting by Ethan Lou in Toronto; Editing by Dan Grebler and Meredith Mazzilli)