Home prices in the Greater Vancouver Area climbed in February despite a generally softening market, according to a report Wednesday by the British Columbia Real Estate Association.
The average sales price reached C$1.06 million (about US$820,000) in Vancouver and its surrounding areas by the end of February, up 6.8% from the average C$995,583 (US$767,525) during the same period last year.
However, the number of sales fell 8.9% year-over-year to 2,241 for the month of February.
|Greater Vancouver Housing Market in February 2018|
|Value||Y-O-Y change||M-O-M change|
|# of Sales||2,241||-8.6%||21.4%|
|Source: British Columbia Real Estate Association|
Across the province of British Columbia, the housing market saw a similar pattern to Greater Vancouver, its largest and most expensive housing market. That is, sales were down while prices continued to grow.
A total of 6,206 homes were sold across British Columbia in February, a 5.7% decline year-over-year. The average sale price was $748,327 (US$576,908), up 8.8% from February 2017.
Slower sales were mainly attributable to government cooling measures, especially tighter mortgage qualifications introduced by the Office of the Superintendent of Financial Institutions, Canada’s top banking regulator, at the beginning of 2018.
New mortgage rules required banks to “stress test” borrowers with uninsured loans (generally those loans with down payments of over 20%) to see if they can afford higher interest rates.
“More stringent mortgage qualification rules for conventional borrowers are dampening housing demand in the province,” said Cameron Muir, the Association’s chief economist, in the report.
Since the new rules went into effect, home sales in the province have fallen more than 26% on a seasonally adjusted basis, according to Mr. Muir.
Historically, housing demand typically becomes subdued for four to seven months following mortgage policy tightening, the report said. The largest impact generally occurs in the third month after implementation, which means the housing market will likely fare worse in March.
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