Photo: Deb Rousseau/Unsplash
It hadn’t happened for about a year and a half, but in July BC home sales posted an annual increase, according to the British Columbia Real Estate Association (BCREA).
“BC home sales climbed higher for the first time in 18 months on a year-over-year basis in July,” says Cameron Muir, BCREA’s chief economist, in a news release.
Some 7,930 homes changed hands throughout the province in July, accounting for an increase of 12.4 percent over last year. In the key Greater Vancouver market, where 2,584 of the transactions took place, activity was up sharply by 22.6 percent.
“Households appear to be adjusting to the tighter credit environment as the shock of the B20 stress test dissipates,” Muir continues, referring to Guideline B-20, a policy framework from the Office of the Superintendent of Financial Institutions that was introduced in January 2018.
The federal financial-system watchdog’s Guideline B-20 included a stress test for uninsured mortgage applicants. The recently created rules mean that borrowers with downpayments of 20 percent or more generally have to qualify at a rate that is 200 basis points higher than what their federally regulated lender is offering on contract.
Similar stress testing had already existed for uninsured mortgages — those loans for which the borrower has a downpayment of less than 20 percent and therefore requires insurance — since 2016.
BC sales activity may have soared relative to year-ago levels but remains far short of previous peaks, and the average selling price of a home in the province last month was $684,497, down 1.6 percent annually.
The decline in Greater Vancouver was even more pronounced, as the average home price tumbled 5.6 percent to $967,314 over the same period.
July was the second consecutive month that the benchmark Vancouver area home price was below $1,000,000.
