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

Apparent gas leak on Highway 33 in Kelowna

Emergency crews have taped off access to Centex Gas on Highway 33 near Asher Road

Kelowna RCMP plan mini parade past KGH to recognize health care workers

Kelowna officers will flash lights and sounds both Saturday and Sunday night

Perry and Stanley awarded top UBC Okanagan rookies

The volleyball star and soccer star won the prize over Heat’s virtual awards banquet

Interior Health officials outline pandemic response in virtual town hall

Kelowna-Lake County MLA Norm Letnick moderates digital discussion, Q&A with Interior Health leadership

Second Vernon-area high school exposed to COVID-19

Kalamalka Secondary School staff, students urged to self-isolate if showing symptoms

UPDATE: Coronavirus concerns prompt event cancellations across the Okanagan

This is a running list of events cancelled across the Okanagan

B.C. is seeing the highest rate of COVID-19 recovery in Canada, and there’s a few reasons why

British Columbia was one of the first to see rise in COVID-19 cases, and has also switched up testing

Earth Hour 2020 kicks off online Saturday night

Action moves online due to COVID-19

Okanagan woman baking for those in need amid COVID-19

Vernon’s Crystal Hedlund launched a GoFundMe page to generate funds for baking materials

Okanagan distillery hands out thousands of sanitizer bottles, needs help in COVID-19 fight

Okanagan Springs is donating hand sanitizer to help fill COVID-induced shortages

B.C. COVID-19 cases rise 92 to 884, one more death, 81 in care

Outbreak action underway in 12 long-term care homes

B.C. veterinarians want to smooth the fur of COVID-19-worried pet owners

Vets expect to continue giving your fur buddies the help they need while social distancing

B.C. VIEWS: Small businesses need our help

Just as integral in neighbourhoods in Vancouver and Surrey as they are in Prince George or Kelowna

Most Read