B.C. real estate board blames stress test for dampening home sales in February

Housing prices also saw a 9.3 per cent dip in February, with average sales sitting at $678,625

Prospective homebuyers continue to be sidelined by the mortgage stress test, leading to dampening home sales across B.C. February, says the provincial real estate board.

The British Columbia Real Estate Association said in its report Wednesday that a total of 4,533 residential sales were recorded last month, which is a decline of 27 per cent from the same month last year.

Housing prices also saw a 9.3 per cent dip, with an average of $678,625.

On Tuesday, the real estate board joined a chorus of other major housing associations in urging the federal government to revisit the B-20 mortgage stress test, criticizing it for pushing homebuyers out of the market.

Across Canada, the annual pace of housing starts slowed in February as higher mortgage rates and less stimulative economic conditions helped soften demand, Canada Mortgage and Housing Corp. said last week.

The housing agency said the seasonally adjusted annual rate of housing starts fell to 173,153 units in February compared with 206,809 units the month before.

Economists had expected an annual pace of 205,000, according to Thomson Reuters Eikon.

READ MORE: B.C. real estate board urges feds to revisit mortgage stress test

“As a leading indicator of economic activity, February’s steep decline in housing starts may raise some eyebrows in Ottawa,” Fotios Raptis, senior economist at TD Bank, wrote in a report.

“Although housing starts seemed to be unscathed by the new B-20 regulations that took effect in January 2018, higher borrowing costs and tougher mortgage qualifying conditions may finally be taking a toll on new residential construction.”

The slowing housing starts come as sales of existing homes has also been slowing. The Canadian Real Estate Association reported home sales posted their weakest January since 2015.

Rising mortgage rates and tighter lending rules have been blamed for the slowdown in sales, prompting some to call on the federal government to make changes in the upcoming federal budget to help first-time homebuyers.

CIBC economist Royce Mendes said 2019 is shaping up to be a tougher year for homebuilding.

READ MORE: Mortgage test, high supply to keep cooling B.C. housing prices in 2019, report says

READ MORE: Real estate board calls on Ottawa to revisit mortgage stress test

“Residential investment was downright ugly in the fourth quarter, and the latest reading on housing starts only added to the bad news on Canadian homebuilding,” Mendes wrote.

“Prior to this reading, starts had seen a bit of a renaissance, rising back above 200,000 for four straight months. But the market has been a contending with the effects of higher interest rates and stricter lending standards, and a pace of 200,000 looked unlikely for the year as a whole.”

The overall decline in the pace of housing starts came as the annual rate of urban starts fell 18.0 per cent in February to 155,663 units.

The pace of urban multiple-unit projects such as condominiums, apartments and townhouses fell 20.2 per cent to 116,284 units, while single-detached urban starts dropped 10.6 per cent to 39,379 units.

Rural starts were estimated at a seasonally adjusted annual rate of 17,490 units.

The six-month moving average of the monthly seasonally adjusted annual rates of housing starts was 203,554 in February, down from 207,742 in January.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

Delays en route for Highway 7 in Harrison Mills

Road resurfacing will cause month-long delays for drivers travelling through Harrison Mills

The luckiest man in Agassiz finds more than 200 four-leaf clovers

Walt Hardinge has found more than 219 four-or-more leaf clovers this spring alone

Chilliwack’s pediatric observation unit gets financial shot from trades workers

Unions and contractors donate more than $30,000 to Fraser Valley Health Care Foundation

Missing Chilliwack man not heard from since January

Kristopher Shawn Couture, 25, last made contact with family from Edmonton

Two week lock down lifted for Kent Institution

A search at the prison found nearly 26 grams of hashish and a cellphone

VIDEO: Quadriplegic man takes flight over Harrison Mills

Jim Ryan hasn’t moved his arms or legs for three years, but that didn’t stop him from paragliding

Raptors beat Bucks 105-99 to move within 1 game of NBA Finals

Leonard scores 35 as Toronto takes 3-2 series lead over Milwaukee

Fraser Valley man dead after car hurtles from embankment west of Campbell River

Survivor of crash rushed to hospital by helicopter in serious condition

B.C. premier hints at twin-tunnel plan for Metro Vancouver’s Massey Tunnel

John Horgan cancelled plans for a 10-lane bridge to replace the 60-year-old tunnel shortly after taking office

Police investigate ‘serious collision’ between motorcycle, truck in Vancouver

Motorists asked to stay away from Blanca Street & West 4 Avenue

Municipalities protest after B.C. declares marijuana crops ‘farm use’

UBCM president seeks answers in letter to John Horgan government

CMHC defends mortgage stress test changes amid calls for loosening rules

Uninsured borrowers must now show they could service their mortgage if rates rose two per cent

Metro Vancouver mayors ask public to lobby feds for annual $375M transit fund

Mayors renewing their call for transit funding as federal election looms

B.C. woman left ‘black and blue’ after being pushed off 40-foot cliff at lake

West Shore RCMP looking for witnesses as investigation continues

Most Read