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.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Clinton and District Community Forest passes audit

According to a news release from Forest Practices Board on Feb. 19,… Continue reading

Research casts ‘last stop sign on Trans-Canada’ claim into doubt

Sign was removed from junction of Highways 1 and 97 in Cache Creek in February 1984

Savona athletes head to BC Winter Games

Akira Susanj and Alexander Teague competing in karate events

Ashcroft councillor wants to revisit Village’s burning bylaw

Raven Nyman’s regular report on Ashcroft council

Cache Creek unsuccessful in bid for Quartz Road bridge funding

Highlights from the most recent meeting of Cache Creek council

HIGHLIGHTS: Day one and two at the 2020 BC Winter Games

Athletes had sunny – but cold – weather to work with in Fort St. John

Tyler Toffoli scores twice, Canucks crush Bruins 9-3

Stecher, Miller each add three points for Vancouver

Zamboni driver, 42, earns NHL win over Maple Leafs

Emergency goalie called into action for Carolina Hurricanes

Governor general says multiple solutions needed for ‘complicated’ overdose issue

Julie Payette met at a fire hall with firefighters and police officers as well as politicians and health experts

Landlord ordered to pay $11K after harassing B.C. mom to move days after giving birth

Germaine Valdez was pressured to move just a few days after giving birth by C-section to her child

Heart attacks strike B.C. husband and wife just over one year apart

Courtenay couple share personal stories to bring awareness to heart month

‘Nothing surprises us anymore:’ U.S. border officials find brain in package

U.S. Customs and Border Protection agents found the brain packed in a glass mason jar in a Canada Post shipment

B.C., Ottawa sign sweeping 30-year deal for northern caribou habitat

West Moberly, Saulteau co-manage new protection on two million acres

Eyes on police after Trudeau orders blockades torn down, injunctions enforced

The RCMP in B.C. have sent a letter to the traditional leaders of the Wet’suwet’en Nation

Most Read