The B.C. Real Estate Association (BCREA) says the mortgage stress test introduced by Ottawa one year ago is “largely to blame” for a 24.5% decline in home sales across the province last year.
Data released January 15 reveals the Multiple Listing Service (MLS) recorded 73,345 residential unit sales in 2018 — down significantly from the 103,758 units sold the previous year.
The new numbers put the province below its 10-year average of 84,800 unit sales.
“The sharp decline in affordability caused by the B20 mortgage stress test is largely to blame for a decline in consumer demand last year,” BCREA chief economist Cameron Muir said in a statement.
The federal government introduced the stress test in January 2018 as a means to cool white-hot markets in Vancouver and Toronto.
The B.C. government followed up the next month by raising the 15% foreign buyer tax to 20%, and introducing the tax beyond the original boundaries of Metro Vancouver as a means to address the affordability crisis plaguing many regions on the West Coast.
Meanwhile, data from the BCREA shows that the average residential price in December 2018 came in at $695,647, down 5.2% compared with the same month a year earlier.
The average price for a residential unit in Greater Vancouver hit $1,026,938 in December 2018, down 2.1% compared with December 2017.