Sarah Lee's Real Estate Blog

Housing Market Adjusts to Mortgage Stress Test: BCREA 2019 First Quarter Housing Forecast Update
Vancouver, BC – February 25, 2019. The British Columbia Real Estate Association (BCREA) released its 2019 First Quarter Housing Forecast Update today.

Multiple Listing Service® (MLS®) residential sales in the province are forecast to increase 2 per cent to 80,000 units this year, after recording 78,345 residential sales in 2018. MLS® residential sales are forecast to increase a further 6.9 per cent to 85,500 units in 2020. The 10-year average for MLS® residential sales in the province is 85,800 units.
“The negative shock to affordability and purchasing power created by the B20 stress test on mortgage borrowers is expected to continue constraining housing demand in the province this year,” said Cameron Muir, BCREA Chief Economist. “Favourable demographics along with continuing strong performance of the BC economy is expected to underpin housing demand over the next two years.”
The policy-induced demand shock has contributed to an increase of the inventory of homes for sale in most regions of the province. As a result, market conditions are expected to provide little upward pressure on home prices this year, with the average annual residential price forecast to remain essentially unchanged, albeit up 0.5 per cent to $716,100. Modest improvement in consumer demand is expected to unfold over the next two years as households further adjust to the mortgage stress test.

Housing Market Update: 2019 January

BC Home Sales Decline 25% in 2018
Vancouver, BC – January 15, 2019. The British Columbia Real Estate Association (BCREA) reports that a total of 78,345 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in 2018, a decline of 24.5 per cent from the 103,758 units sold in 2017. The annual average MLS® residential price in BC was $712,508, an increase of 0.4 per cent from $709,601 recorded the previous year. Total sales dollar volume was $55.8 billion, a 24.2 per cent decline from 2017.

“BC home sales fell below the 10-year average of 84,800 units in 2018,” said Cameron Muir, BCREA 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.”
A total of 3,497 MLS® residential unit sales were recorded across the province in December, down 39.1 per cent from December 2017. The average MLS® residential price in BC was $695,647, a decline of 5.2 per cent from December 2017. Total sales dollar volume was $2.4 billion, a 42.3 per cent decline during the same period.
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.

Source:http://www.bcrea.bc.ca/news-and-publications/news-room/news-releases/2018-12-statistical-release

BC Home Sales Continue at Slower Pace

Vancouver, BC – December 14, 2018. The British Columbia Real Estate Association (BCREA) reports that a total of 5,179 residential unit sales were recorded by the Multiple Listing Service® (MLS®) across the province in November, down 33.1 per cent from the same month last year. The average MLS® residential price in BC was $718,903, a decline of 1.9 per cent from November 2017. Total sales dollar volume was $3.7 billion, a 34.3 per cent decline from November 2017.

“BC households continue to struggle with the sharp decline in purchasing power caused by the B20 mortgage stress test,” said Cameron Muir, BCREA Chief Economist. “Most BC regions are now exhibiting relative balance between supply and demand.”
Total active residential listings were up nearly 31 per cent to 33,500 units in November, compared to the same month last year. However, it should be noted that this compares to 2017, when active listings for the month of November were at their lowest level in more than 15 years.
Year-to-date, BC residential sales dollar volume was down 23.1 per cent to $53.4 billion, compared with the same period in 2017. Residential unit sales declined 23.6 per cent to 74,847 units, while the average MLS® residential price was up 0.7 per cent to $713,302.

Housing Market Reacts to Mortgage Stress Test
BCREA 2018 Third Quarter Housing Forecast Update
Vancouver, BC – August 20, 2018. The British Columbia Real Estate Association (BCREA) released its 2018 Third Quarter Housing Forecast Update today.

Multiple Listing Service® (MLS®) residential sales in the province are forecast to decline 21 per cent to 82,000 units this year, after recording 103,768 residential sales in 2017. MLS® residential sales are forecast to increase 8 per cent to 88,700 units in 2019. The 10-year average for MLS® residential sales in the province is 84,800 units.
“The BC housing market is grappling with a sharp decline in affordability caused by tough B20 stress test rules for conventional mortgages,” said Cameron Muir, BCREA Chief Economist. “While these rules have had a negative effect on housing demand across the country, the impact has been especially severe in BC’s large urban centres because of already strained housing affordability.”
In spite of the policy-driven downturn in housing demand, strong fundamentals continue to underpin the market. Demographics are highly favourable, especially the millennial generation who are now entering their household-forming years. In addition, low unemployment is leading to significant upward pressure on wages and, by extension, household wealth and confidence.
The pullback in BC home sales is helping alleviate a chronic shortage of supply. After trending at decade lows, active listings in the province were up nearly 20 per cent in July. The combination of slower housing demand and an increase in the inventory of homes for sale has trended most markets toward balanced conditions. This means more selection for home buyers, fewer multiple offer situations and less upward pressure on home prices.