Home sales plunged 38.8 per cent last month compared with October 2015, the Real Estate Board of Greater Vancouver says.
The board said 2,233 properties were sold in October of this year, down from the 3,646 home sales recorded in the same month last year.
Board president Dan Morrison said changing market conditions combined with a series of government interventions in the real estate market contributed to the decline.
"Potential buyers are taking a wait-and-see approach to try and better understand what these changes mean for them," he said in a statement Wednesday.
"While sales are down across the different property types, it's the detached market that's seen the largest reduction in home buyer demand in recent months," Morrison said.
Both the B.C. and federal governments have brought in a number of measures to address soaring housing costs, particularly in Metro Vancouver.
In August, the provincial government implemented a 15 per cent tax for foreign nationals buying residential property in Metro Vancouver in a bid to stabilize the area's housing prices, which have been among the highest in North America.
Last month, the composite benchmark price for all residential properties in Metro Vancouver was $919,300 -- a 24.8 per cent increase compared to October 2015, but a 0.8 per drop from September of this year.
Anne McMullin, president of the Urban Development Institute, a trade association representing developers in the attached and industrial properties sector, said a drop in sales represents the high-end market, which most residents have not been able to afford for some time.
She said the market began declining several months ago, prior to the foreign buyers tax.
"It was slowing in April of last spring and there's no doubt when you shock a market with a 15 per cent tax people stand on the sidelines wondering what's going to happen," she said.
"It's the high-end, single-family detached market, and it's a lot of money. You're looking at $2 to $3 million. But that's a very, very, very small percentage of the overall market."
McMullin said there hasn't been any drop in sales or price in townhouses and condos and that pre-sales are going at a relatively similar pace since the summer.
"It's not really going to affect the multi-family attached market. People think there's a trickle-down (effect), but there isn't," she said of the drop in sales.
McMullin called the 15 per cent foreign-buyers tax punitive, adding it did not address affordability for the average person looking for a single-family home.
"Single-family homes are still for the wealthy, whether they're foreigners or whether they're locals."
Realtor Adil Dinani said the market is now favourable for people moving up from an attached to a detached home, and it's likely they won't face bidding wars that have been part of real estate in and around Vancouver for several years.
"As long as sellers in the detached market understand there's a different approach in today's market than the approach of listing your home on Monday, having the open house on Saturday, Sunday and having it sold on Tuesday after multiple offers," he said.
Last month, the federal government announced a number of changes that will affect the real estate market.
They included a new requirement for all insured mortgages have to undergo a stress test to determine whether borrowers are still able to make mortgage payments if interest rates rise or their income declines.
Previously, such stress tests weren't required for fixed-rate mortgages longer than five years.