Photo: David Meurin/Flickr
It’s been a year since federal policymakers brought in more stringent mortgage rules, and the BC housing market is still feeling the impact, according to the provincial real estate association.
“BC households continue to grapple with the policy-induced affordability shock created last year by the federal government,” says Cameron Muir, chief economist for the British Columbia Real Estate Association (BCREA) in a statement announcing the release of January’s provincial home sales statistics.
The data showed 3,546 homes changed hands in BC this January, representing a drop of 33.2 percent from the same month a year ago, when the government introduced stress testing for uninsured mortgages.
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As a result of the rule change, those applying for an uninsured mortgage now have to qualify at a higher interest rate than before, setting a higher bar to homeownership and impacting markets throughout the country.
“The resulting pullback in consumer demand is largely responsible for January’s lacklustre performance,” Muir explains.
As demand has wilted, prices have come down in local markets across the province. The average price of a BC home in January was $665,590, down 7.7 percent on a year-over-year basis. Greater Vancouver, where more than half of the province’s residents live, saw prices fall 4 percent to an average of $995,779.
Some markets continued to appreciate. In Vancouver Island, the most active BC market to record a gain in January, prices averaged $466,160, an increase of 9.9 percent. Meantime, the largest increase was in Chilliwack, which had an average price of $533,080, up 11.6 percent.
“Many BC regions are now exhibiting buyer’s market conditions,” Muir adds. “However, BC Northern, the Kootenay, Okanagan Mainline and the Vancouver Island markets continue to reflect balance between supply and demand.”