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

VIDEO: North Island Peewee Eagles unleash avalanche of goals against Peninsula in semi-final showdown

The two teams squared up on Sunday morning at the Chilton Regional Arena in Port McNeill.

North Island Seniors Housing Foundation takes the next step towards getting Trustee Road land

Seniors rejoice, Port Hardy council is very much in favour of helping… Continue reading

Port Hardy Volleyball club requests funding from Port Hardy council

The sport of Volleyball is alive and well in the North Island,… Continue reading

Should aquaculture programs be offered at North Island College in Port Hardy?

“I think it would be very timely to have an aquaculture program”

Island Health issues press release regarding Port Alice Health Centre service changes

Island Health will be hosting a community meeting in Port Alice Feb. 20 at 6 p.m. in the rec centre.

Trudeau’s principal secretary, Gerald Butts, resigns amid SNC-Lavalin furor

Butts categorically denies the accusation that he or anyone else in the PMO improperly pressured former attorney general Jody Wilson-Raybould

Lost a ring? This B.C. man will find it for you

Chris Turner founded The Ring Finders, an international directory of metal detector hobbyists

Poverty coalition has high hopes for B.C. poverty reduction strategy

Funding allocation expected to be released with 2019 budget

‘How did we get here?’: B.C. mom of transplant recipient worries about measles outbreaks

Addison, 7, cannot get a live vaccine because she has a heart transplant

Steelhead LNG stops work on Kwispaa LNG project near Bamfield

Huu-ay-aht First Nations ‘deeply disappointed; Steelhead says funding is the problem

NDP Leader Jagmeet Singh calls for public inquiry over SNC-Lavalin questions

Vancouver member of Parliament Jody Wilson-Raybould resigned from cabinet last week

Canadian airlines waiting for guidance from Ottawa over X gender option

Major U.S. airlines said they will change their process so passengers can identify themselves along non-binary lines

Moose Hide campaign takes message to Canadian schools

Campaign launches new K-12 education platform

‘Violent’ B.C. man wanted on Canada-wide warrant

Prince George man with ties to Vernon sought by police

Most Read