After several consecutive years of skyrocketing residential property values, the prices of luxury houses are starting to cool in Vancouver, Canada’s west coast. New figures by real estate firm Royal LePage showed that during the first quarter of 2018, sales of detached luxury homes decreased 38.2 per cent compared to the same period in 2017, while sales of luxury condos decreased 26.5 per cent. In that same period, the median price of a luxury detached home in Greater Vancouver rose 5.2 per cent year on year to C$5.79 million (US$4.53 million), while the median price of a luxury condominium rose seven per cent year on year to C$2.5 million during the same period. However, price changes tended to lag changes to sales volume, and Royal LePage predicted that by spring 2019, the median price of a luxury detached home in Greater Vancouver would fall by three per cent to C$5.62 million year on year. Luxury condominiums were forecast to increase by two per cent to C$2.55 million during the same period, the report said. However, Royal LePage realtor Brock Smeaton said the market was more turbulent than the numbers suggested. Smeaton conducted his business in the municipality of West Vancouver – one of the region’s most luxurious markets. He said the first four months of this year for house sales in West Vancouver “have been the worst month ever for sales volume”, with sales and prices dropping. “There is absolutely no question that the prices are down,” he said. “I’m telling you they’re down and they’re down by more than five per cent.” He said the inventory of luxury houses for sale was climbing and sales were dropping. Transactions in the ultra-luxury market in West Vancouver had ground to a halt, he said. “In West Vancouver, where I work, there are about 50 houses for sale [listed at] over 10 million. There has been one sale the whole year.” Sales in the broader market were also slowing. Residential property sales of all types in the region totalled 2,579 in April 2018, a 27.4-per cent decrease from the 3,553 sales recorded in April 2017, according to the Real Estate Board of Greater Vancouver (REBGV). Last month’s sales were 22.5 per cent below the 10-year April sales average, the REBGV said. The 30-year average for detached house sales in the region in March was about 1,350 houses, Smeaton said. “This year we had 725. That’s a staggering drop.” Smeaton and his firm agreed that several causes were at play in the cooling of the market. The region has seen less interest from foreign buyers since China tightened its policies on wealth leaving the country Brock Smeaton, Royal LePage “The region has seen less interest from foreign buyers since China tightened its policies on wealth leaving the country,” he said. “More recently, [new] mortgage stress tests and the 2018 British Columbia budget, which contains a speculation tax as well as an increase to the property transfer tax and school tax for all homes over C$3 million, will significantly affect foreign and domestic buyer activity in 2018.” He said the market had been cooling since summer 2016, when the provincial government enacted a 15-per cent tax on residential properties bought by foreigners. That tax has since been increased to 20 per cent. “I don’t think there’s going to be a crash,” Smeaton said. Instead, he expected a correction that could be sustained over the next six to eight months.