Guideline B-20 Stress test continues to impact housing sales in BC but Vancouver Island is a bit more sheltered. The Vancouver Island Real Estate Board, which stretches from North of the Malahat on Vancouver Island, reported sales of single-family homes in February dropped by 28% year over year but were up 10% from January.
Despite lower demand year-over-year benchmark prices of single-family homes continue to rise board-wide, up around nine per cent from January 2018. Price increases in individual markets ranged from five per cent in Nanaimo to 17 per cent in Port Alberni. Although Vancouver Island has felt the effects of the mortgage stress test. Also referred as Guideline B-20. The toll on single-family housing sales throughout the province in January dropped by 28 per cent from one year ago, albeit they did rise by 23 per cent from December 2018. General demand is lower while potential Buyers adjust however there still is very little supply in active price points keeping the markets somewhat balanced.
Annual sales of single-family homes in 2018 totalled 4,543, a 19 per cent drop from 2017. However, this reduction reflects the market returning to more normal levels after the robust housing markets witnessed in 2016 and 2017.
Government policy-side measures introduced to cool the market, such as the mortgage stress test (Guideline B-20), eroded the purchasing power of some prospective home buyers by as much as 20 per cent. Despite lower demand, however, year-over-year benchmark prices of single-family homes continue to rise board-wide, up 10 per cent from December 2017.
Sales of single-family homes in November on Vancouver Island declined by 28 per cent from one year ago and were 21 per cent lower than in October. Last month, 305 single-family homes sold on the Multiple Listing Service® (MLS®) System compared to 384 in October and 426 one year ago. Modest inventory increases are helping The Vancouver Island Real Estate market transition from one favouring sellers to a balanced or near-balanced market. Active listings of single-family homes have dropped each month since hitting this year’s high of 1,418, which occurred in July.
The erosion of affordability in larger markets is pushing more buyers away. However the purchasing power caused by the mortgage stress test and rising interest rates continue to be a concern though, continuing strong performance in the economy combined with favourable demographics is expected to push home sales above their 10-year average in 2019.
Sales of single-family homes in September dropped by 32 per cent from one year ago and 25 per cent from August 2018.
Sales of single-family homes in August were seven per cent higher than in July but dipped by 14 per cent from August 2017.
Prices of single-family homes, apartments, and townhouses continue to rise in the VIREB area despite cooling sales in certain markets. Last month, 437 single-family homes sold on the Multiple Listing Service® (MLS®) System compared to 438 in June and 556 one year ago, a decrease of 21 per cent.
The benchmark price of a single-family home in the Vancouver Island Board area broke the $500,000 mark in May, rising to $507,700, a 17 per cent increase from one year ago. With Nanaimo above the $525,000 mark. Single-family homes are down 17 per cent from last year but posted a month-over-month increase of nine per cent. Last month, 520 single-family homes sold on the Multiple Listing Service® (MLS®) System compared to 476 in April and 630 one year ago.
As we enter the spring market we will see an increase in activity. We did see home sales drop slightly in March and April 2018, likely due to a combination of government policy changes, stricter mortgage qualification rules, and consumer uncertainty surrounding new provincial taxes. Last month, 399 single-family homes sold on the Multiple Listing Service® (MLS®) compared to 316 in February and 482 one year ago in the Vancouver Island Real Estate Board.
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