Vancouver home sales fall amid changes to mortgage rules, higher interest rates

Home sales in Metro Vancouver fell more than 14 per cent below the 10-year average in February as buyers contended with stricter mortgage rules and higher interest rates, according to statistics released Thursday.

The Real Estate Board of Greater Vancouver’s data showed that 2,207 homes sold last month. That’s down nine per cent from the same time last year and 14.4 per cent from the 10-year February average.

Detached homes experienced the biggest drop, down 39.4 per cent compared to the average. Townhomes fell 6.8 per cent, while condos rose 5.5 per cent.

“Rising interest rates and stricter mortgage requirements have reduced home buyers’ purchasing power, particularly for those at the entry level of our market,” Jill Oudil, president of the Real Estate Board of Greater Vancouver, said in a statement.

The Office of the Superintendent of Financial Institutions implemented new lending guidelines in January that require borrowers who don’t need mortgage insurance to show they would still be able to make payments if interest rates rise. The Bank of Canada has raised rates three times since last summer to the current overnight rate of 1.25 per cent. Such hikes increase the cost of variable-rate mortgages. They have also increased the cost of new fixed-rate mortgages.

“Even still, the supply of apartment and townhome properties for sale today is unable to meet demand,” Oudil said. “On the other hand, our detached home market is beginning to enter buyers’ market territory.”

In February, the sales-to-active listings ratio for townhomes and condominiums was 37.6 per cent and 59.7 per cent, while for detached homes it was 13 per cent.