Home sales in British Columbia have slowed to their lowest point in four years, with realtors in Canada’s Pacific Coast province predicting only 80,000 sales this year.
The year-end estimate from the British Columbia Association of Real Estate would mark a 23% decline from the 103,768 on-market sales recorded last year and the fewest sales since 2014, the association said in a report published Thursday. The slowdown is even more pronounced in Vancouver, where a mix of local and national measures have cooled a white hot housing market and soaring home prices.
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In Greater Vancouver, home sales for the year are on pace to hit less than 26,000 to fall around 30% from last year.
The slowdown follows a government-imposed stress test for mortgage borrowers, which in effect reduced the amount many home buyers could borrow beginning at the start of 2018.
"After its introduction in January, the stress test on conventional mortgages has cooled housing markets across the country," according to the BCREA report.
House hunters in expensive cities like Vancouver were hit particularly hard, as they find it even harder to afford a home under the tightened lending conditions, the association said.
Since 2016, the local government has also imposed a 20% tax on foreign home purchases out of fears that Vancouver was becoming a safety deposit box for global capital.
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The new mortgage rule has also indirectly worked in favor of buyers by cooling runaway price growth in the provincial capital. This time last year, annual price growth was around 14%, a windfall for baby boomers looking to downsize while pricing out many would-be homeowners.
Home price growth has now deflated to meager 1.8%, much closer to the rate of inflation and allowing for more stability into 2019, the association said. "Despite the policy-driven ebb in home sales, the B.C. economy continues at above-trend growth, providing a solid foundation to housing demand."