Suddenly Scared of Vancouver’s Commercial Property Bubble?

The hunt is on for Chinese buyers.
For investors, Vancouver real estate has been a heavenly gift. But now, suddenly, some of the biggest institutional investors, including Canada’s third largest pension fund, are getting cold feet and want out.
Just over the past 12 months, the ‘benchmark price’ soared 27% for apartments and 38% for detached houses! The term ‘housing bubble’ doesn’t even do it justice.
But in July, British Columbia implemented a 15% transfer tax on home purchases involving foreign investors, an effort to put a lid on the price spiral that’s threatening to price an entire generation out of the housing market. By the end of July, the first squiggles appeared, as prices still soared but year over year sales volume plunged nearly 20% [read… Vancouver Housing Bubble, Meet Pin].
Preliminary reports for August are now trickling in as anecdotal and incomplete data in a slow summer month, and therefore not necessarily indicative. For example, the Canadian publication, Global News, summarized the August move with plenty of caveats: ‘Vancouver real estate market is in the midst of a major slowdown, with prices dropping and sales plummeting.’
We will know more when the monthly data emerges.

This post was published at Wolf Street by Wolf Richter ‘ August 23, 2016.