The latest numbers from the B.C. Real Estate Association raise questions whether the B.C. government will achieve this year's revenue target for property-transfer taxes.
In the February budget, Finance Minister Carole James forecast that property transfers would bring in more than $2.1 billion in the fiscal year ending on March 31, 2019.
The budget forecasts more than $2.2 billion flowing into the provincial treasury in each of the following two years as a result of property transfers.
But in the first six months of 2018, only $859 million was raised through the property-transfer tax. At that rate, just over $1.7 billion would be generated over the 12-month calendar year.
And today, the BCREA revealed that there was a 23.9 percent decrease in Multiple Listing Service sales across B.C. in July, compared to the same month of 2017.
The total dollar volume was $4.9 billion in July, down 24.2 percent from July 2017.
So far this year, there's been an 18.9 percent decline in the total value of MLS transactions.
That stands in sharp contrast to the B.C. NDP government's last budget forecast. It predicted that property-transfer tax revenue will grow by 2.6 percent annually in each of the next three years.
This increase was expected as a result of higher transfer taxes on expensive homes and by boosting the foreign buyers tax from 15 to 20 percent and extending it outside of the Lower Mainland to other areas of B.C.
Despite this optimism for greater real-estate revenue, the budget document acknowledges that uncertainty and volatility could have an impact on the amount of money collected.
The property-transfer tax is charged at one percent on the first $200,000 and two percent on the portion of fair-market value greater than $200,000 and up to $2 million.
The government imposes a three percent tax on the amount between $2 million and $3 million, and another two percent on amounts exceeding $3 million.
Earlier this month, the Real Estate Board of Greater Vancouver reported that detached homes on Vancouver's West Side and in West Vancouver experienced the biggest annual price drops over the past year. They fell 8.4 percent and 8.3 percent, respectively, over a 12-month period.
These areas have the most expensive homes. So any fall in prices of detached homes on the West Side and in West Vancouver will have a greater effect on property-transfer taxes than if home prices fell in other areas of the province.
According to the B.C. Real Estate Association, the average MLS residential price has risen 2.1 percent this year to reach $725,639.