B.C. home sales continue to slide in January

Real estate group says the federal mortgage stress test to blame for ‘lacklustre performance’

Home sales in B.C. were down 33 per cent in January, according to the B.C. Real Estate Association, which blames the slump on the federal government’s mortgage stress test.

The BCREA reported Friday a total of 3,546 residential sales were recorded by the Multiple Listing Service last month, a decline of 33.2 per cent from the same month last year.

The average price in the province was $665,590, a decline of 7.7 per cent from January 2018. Total sales were $2.36 billion, a 38.4-per- cent decline from the same month last year, according to the report.

Cameron Muir, chief economist with the BCREA, blamed the federal government’s B20 mortgage stress test for the decline in home sales.

“B.C. households continue to grapple with the policy-induced affordability shock,” said Muir, in a statement Friday. “The resulting pullback in consumer demand is largely responsible for January’s lacklustre performance.”

The mortgage-lending restrictions, or B20 stress tests, which were brought in at the start of 2018, require lenders to prove they can make payments at two percentage points higher than the qualifying mortgage rate.

Muir noted that as a result many B.C. cities are considered in buyer market conditions, with the exception of the Northern B.C., the Kootenay, Okanagan, and the Vancouver Island markets.

Total MLS residential active listings increased 41.2 per cent to 29,522 units compared to the same month last year.

The ratio of sales to active residential listings declined from 25.4 per cent to 12 per cent over the same period.