Chinese exodus hits Vancouver housing

By Leith van Onselen

The Teranet-National Bank House Price Index for November has been released, which shows that Canadian house prices were flat in January with annual growth falling:

Across the three major markets, values fell by 0.3% in Vancouver in January, whereas values rose by 0.1% in Toronto and 0.2% in Montreal.

In the year to January, Canadian home values rose by just 2.2%, still up from the post-GFC low of 1.4% in August but clearly retracing. The weakening was driven by Vancouver where annual price growth has plunged to 0.0%. Elsewhere, annual price growth was 3.6% in Toronto and 4.5% in Montreal.

The Real Estate Board of Vancouver reported much deeper falls, caused in part by the exodus of Chinese capital:

The numbers don’t lie — the city of Vancouver is in the midst of a massive correction in its residential market.

The composite home price for Metro Vancouver fell 4.5 percent in January on a year-over-year basis to $780,000, the most significant yearly fall since May of 2013. That price is 8 percent below the market’s peak in June, according to numbers compiled by the Real Estate Board of Greater Vancouver…

A local realtor estimates there’s 19.5 months worth of unsold inventory on the market. Sales in the city fell 32 percent last year, according to Canadian Real Estate Association data.

Vancouver home prices have skyrocketed in recent years thanks in part to an influx of foreign capital, mostly coming from mainland Chinese buyers.

The high-end market has been hit especially hard as foreign capital dries up.

The same forces are at play in Sydney and Melbourne, where Chinese demand has similarly dried-up.

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