A banner year in 2011 is making 2012 look sluggish for Metro Vancouver's luxury home market.

But although sales are slowing, 2012 is still on pace to be the second-best year ever for luxury home sales.

A semi-annual report by Macdonald Realty concluded that luxury sales - homes worth $3 million or more - are down by nearly half compared with the first six months of 2011.

The report noted that 243 homes priced at more than $3 million sold between January and the end of June, compared with 466 in the first six months of 2011.

A total of 691 luxury homes were sold in all of 2011, followed by 375 in 2010, with Macdonald Realty forecasting that the 2010 totals will be topped by this year's total sales.

Of the 243 sales so far this year, 60 sold for more than $5 million, including four condos.

One reason for the drop in sales is that the wave of Asian investment that propelled much of the 2011 market has largely disappeared.

"We're not seeing the international buyers like before," said Matthew Lee, Macdonald Realty's manager of residential sales. "We've seen some down-ward pressure on prices, but it's not been a lot."

Cameron Muir, chief economist for the B.C. Real Estate Association, said it's no surprise that sales are down.

"Last year, in the first half there was a sizable jump in sales of luxury single detached homes. So I'm not surprised to see some large declines year over year. It was an anomaly last year [and] it's returning to normal."

Macdonald Realty's report noted that the most expensive home sold so far this year was for $19.8 million.

According to the property research firm Landcor Data Corp., a house at 4803 Belmont Ave. in the West Point Grey area of Vancouver sold for $19.75 million on June 14, more than $5 mil-lion above the price of the second most expensive home.

The Landcor data also showed that seven of the 10 most expensive homes sold so far this year were in Vancouver, two in West Vancouver and one in the University Endowment Lands.

In 2011, the most expensive home sold was for $16.8 million, also in Vancouver.

The most expensive condo sold so far this year was for $5.9 million, with 25 condos selling for more than $3 mil-lion this year, the survey added.

According to Macdonald Realty, most neighbourhoods affected by wealthy Chinese buyers over the past few years - Vancouver's west side, Richmond and West Vancouver - now have high inventories with lower sales.

As for prices, Lee said buyers and sellers are in a standoff. Buyers have seen prices rise sharply in the past couple of years and don't believe they will rise much higher, so they are delaying making offers.

Many sellers, however, can afford to hold out for the prices that they want.

"They're not in a position where they need to make a panic sale," Lee said. "It's not a high-leverage sector. They have the financial means to wait it out and they'll make the decision [to sell] when the time is right for them."

Dan Scarrow, Macdonald Realty's vice-president of corporate strategy, said the luxury real estate market is much more unpredictable than the entry-level market because it's disconnected from economic fundamentals like income.

He also said buyers are more cautious because of the faltering real estate market in China, economic uncertainty in Europe and current high prices.

"[Buyers of luxury homes] tend to have a lot of wealth and they put in a lot of equity," Scarrow noted. "Their buying patterns aren't set by how much they can borrow, whereas the traditional market is set by interest rates and income."

He added that while there are fewer Asian buyers of luxury homes, a lot of wealthy locals are still buying.