Drop in home prices forecast – Metro US

Drop in home prices forecast

The price of an average two-storey house in Vancouver approached $1 million in the first half of 2010 after rising faster than anywhere else in the country.

However, according to new survey data from Royal LePage, a drop in home pricing is in sight, due in part to the HST.

“Anecdotal evidence suggests that (the HST and other factors) may have prompted an increase in housing market activity in early 2010, as people sought to get out ahead of the changes,” said Phil Soper, chief executive of Royal LePage Real Estate Services.

Under the new tax structure, prospective homebuyers will need to fork out a 12 per cent levy for inspectors, appraisers, and realtor commissions, where previously the five per cent GST had applied.

The five per cent tax will continue on new homes below $525,000, while the HST will apply to new homes above the threshold, less a nominal rebate.