A near-25 per cent drop in B.C. home sales in 2018 is being “largely” attributed to the mortgage stress test that was introduced in January 2018, which reduced buyers’ purchasing power.
A total of 78,345 homes were sold on B.C.’s Multiple Listing Service in 2018, a drop of 24.5 per cent from the 103,758 units sold in 2017, the B.C. Real Estate Association reported January 15.
“B.C. home sales fell below the 10-year average of 84,800 units in 2018,” said Cameron Muir, BCREA’s chief economist.
“The sharp decline in affordability caused by the B20 mortgage stress test is largely to blame for decline in consumer demand last year.”
Despite this slowdown, the average sale price of all B.C. homes sold in 2018 was no lower than the previous year, edging up 0.4 per cent to $712,508 – an increase of just under $3,000.
This slight overall rise masks the varied trajectory of price activity in 2018, in which the average B.C. sale price each month continued rising to record levels until late spring, but has been declining gradually since then, as fewer high-end homes sold.
The region to see the biggest slowdown in sales activity was Greater Vancouver (down 30.4 per cent) followed by the Fraser Valley (-26.3 per cent). The only board to see an annual jump in home sales was the booming B.C. Northern region, which saw a rise of 10.2 per cent over 2017. All boards posted a year-over-year increase in the average home sale price.
The BCREA also reported on December 2018’s market statistics. A total of 3,497 homes exchanged hands on the province’s MLS in December, down 39.1 per cent from December 2017.
The average B.C. home sale price in December was $695,647, a decline of 5.2 per cent compared with December 2017.
The BCREA added, “Total active residential listings were up 33.3 per cent to 27,615 units in December, the highest December inventory since 2014 when 33,995 active residential listings were recorded.”