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Vancouver home sales down 26 percent after foreign ownership tax

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.

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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.

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

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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.

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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

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“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.

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“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.”

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(Reporting by Ethan Lou in Toronto;

Editing by Dan Grebler and Meredith Mazzilli)

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