B.C. home sales drop 25% in 2018

The B.C. Real Estate Association points to the federal government’s mortage stress test

Home sales in B.C. dropped by a quarter in 2018, with analysts blaming tighter mortgage restrictions.

According to the B.C. Real Estate Association, about 78,000 home sales were recorded last year, compared to roughly 103,700 the year before.

“The sharp decline in affordability caused by the B20 mortgage stress test is largely to blame for decline in consumer demand last year,” said Cameron Muir, the association’s chief economist, in a news release Tuesday.

The federal government enacted strict mortgage rules on Jan. 1, 2018, including a new stress test for home buyers as a way to cool off the hot real estate market.

But the dip in the number of sales had no dent in the average price of a B.C. home, which increased by 0.4 per cent last year to $712,508.

Nationwide, excluding Greater Vancouver and the Greater Toronto Area – the most active and expensive markets – the average annual sale price was just under $375,000.

READ MORE: B.C. real estate group predicts dip in home sales, not in prices in 2018

READ MORE: Here’s the one property among B.C.’s 10 priciest that’s not in Vancouver

B.C.’s dip in sales mirrored the rest of the country, which saw the weakest annual sales since 2012.

“The stress-test has weighed on sales to varying degrees in all Canadian housing markets and will continue to do so this year,” Canadian Real Estate Association president Barb Sukkau said in a news release.

But while the province’s average housing price increased, Canada overall faced an average decrease of 4.9 per cent.

BMO Capital Markets senior economist Robert Kavcic took the drops to be signs that the market has softened and “the headline-grabbing drama in recent years has largely run its course.”

“It’s probably not a stretch to think that the Canadian housing market has entered into a prolonged period of relative stagnation, where sales are roughly flat and prices no longer outrun inflation,” he wrote in a note to clients.

“This would be a big change compared to conditions we’ve experienced over the past decade, especially in Toronto and Vancouver, but it’s not at all uncommon when looking back through history and across different markets.”

Vancouver, he pointed out, finished the year at the lowest seasonally adjusted level since the Great Recession, leaving buyers in control.

Looking ahead, TD Bank economist Rishi Sondhi predicted declines seen in December will weigh on residential investment and overall economic growth across all markets.

“Our forecast calls for Canadian sales to basically tread water after 2018’s plunge, as the impact of rising borrowing costs and tighter lending conditions are countered by strong population gains and on-going job growth,” Sondhi said in a note to investors.

“Still, the level of sales will remain relatively low compared to recent years.”

With files from Tara Deschamps, The Canadian Press


@ashwadhwani
ashley.wadhwani@bpdigital.ca

Like us on Facebook and follow us on Twitter.

Just Posted

Developers withdraw rezoning application for huge Parksville waterfront plan

IAG to create new draft after processing public feedback

Part Three: 10 questions with a Qualicum Beach historian

Local guide shares stories of town’s foundations

Andrew Scheer makes campaign stop in Parksville

Federal Conservative leader talks tax cuts, environment

VIDEO: Drone footage documents work to free salmon at Big Bar landslide

Video shows crews working to remove rocks and wood, and transporting salmon by helicopter

B.C. party bus company to be monitored after 40 intoxicated teens found onboard

Police received tip teens and young adults were drinking on party buses and limousines in Surrey

Rick Mercer calls out Conservative candidate in B.C. for fake meme

‘Not true. All fake. Please Stop,’ tweeted Rick Mercer in response

Bear killed in Kimberley after chasing girl, wreaking havoc on town

This particular brown-coloured bear has been the subject of many calls this summer; very food habituated, CO says

Vancouver Island man bikes through B.C. Interior for mental health, addiction awareness

Vancouver Island Resident Mat Fee is approaching the final phase of his cross-Canada bike journey to raise awareness about addiction recovery.

Police investigate after intoxicated teens clash with security at B.C. fair

18-year-old woman arrested and RCMP looking at possible assault in Victoria-area fall fair incident

BC SPCA investigating after three dogs found shot dead in Prince George ditch

The three adult dogs appeared to be well cared for before being found with gunshot wounds, BC SPCA says

Boy overdosed on illicit anti-anxiety drug found on Kelowna classroom floor, RCMP say

Noah Mills, 8, ingested a pink powdery substance off his Kelowna classroom floor

Psychiatric assessment ordered for man accused in Salmon Arm church shooting

Lawyer tells court accused was diagnosed with psychosis hours after his arrest

Most Read