Report says government policies weigh on declining B.C. housing market

Despite B.C.’s strong economy, real estate transactions will decline 11 per cent in 2019

A real estate market outlook by Vancouver’s Central 1 Credit Union says tougher federal and provincial government housing policies are behind a drop in demand for resale housing in British Columbia.

The report released on Tuesday says Vancouver is the epicentre of a real estate downturn where home sales dropped 40 per cent since the end of last year as stricter policies deter potential buyers while sellers wait on the sidelines for a rebound.

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

The federal government’s mortgage stress test, requiring buyers to prove they can withstand future interest rate hikes, cut purchasing power by 20 per cent, while the B.C. government’s 20 per cent foreign buyers tax sent international buyers out of the province, the report says.

Report author, Central 1 deputy chief economist Bryan Yu, said that despite B.C.’s strong economy, real estate transactions will decline 11 per cent in 2019 and home values will drop four per cent before a mild market rebound.

“We’re probably hitting a bottom,” said Yu in a telephone interview. “We will probably be heading up at some point in 2019. It’s not going to get much worse than this.”

Finance Minister Carole James said the B.C. government’s measures to moderate the market, including the speculation and vacancy tax on vacant properties, will take time to increase the availability of rental properties and reduce property speculation.

“I’m seeing cautiously optimistic signs, a little bit of an increase in the vacancy rate, a little bit of softening of prices, but I think we’ve got a long way to go.”

A recent government-commissioned report said money laundering caused home prices across the province to increase by five per cent in 2018.

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

James has said money laundering could have distorted Metro Vancouver’s market by as much as 20 per cent.

“When you think of a family who can’t afford to buy a home, money laundering impacts everyone and we have to address it,” she said in an interview on Tuesday.

Yu said his report did not examine the possible impact of money laundering on B.C.’s real estate market. He said the money laundering report and its conclusions were based on international data and projections from those numbers.

“These were model-driven numbers based on international numbers and I would say very little localized information,” said Yu. “It seems to me we’re really still searching for those numbers and trying to get a better grasp of them.”

Dirk Meissner , The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

First Nations included in latest Columbia River Treaty talks

Seventh round of negotiations between Canada and U.S. wrap up in Washington D.C.

Runners hit the streets for Special Olympics

Cranbrook RCMP teamed up with Cranbrook Safeway on Saturday, June 22, for… Continue reading

School board reports January malware attack

Email systems compromised at board office and Fernie Learning Centre, according to memo

Bowen Byram goes fourth overall in the 2019 NHL Entry Draft

The Cranbrook native was picked by the Colorado Avalanche in the NHL draft

Residents asked to leave ‘fawn in area’ signs alone

Signs are there for the protection of deer and people

Video shows fireworks shot at swan in Alberta

Alberta Fish and Wildlife is investigating the incident in Grande Prairie

‘Text neck’ causing bone spurs to grow from millennials’ skulls, researchers say

Technology use from early childhood causing abnormal bone growths in 41 per cent of young adults

B.C. teen killed by fallen tree on field trip remembered as hero

13-year-old Tai Caverhill was the first to spot the tree falling and warned his friends

Surrey RCMP raises Pride flag amid din of protesters

There were about 30 protesters on either side, and 20 Mounties doing crowd control

Should B.C. get rid of Daylight Saving Time?

The province wants to know, as state governments down south make the move

Air Canada reviewing how crew left sleeping passenger on parked plane

In a Facebook post, the woman said she woke up ‘all alone’ on a ‘cold dark’ aircraft

Canadians crash out of Women’s World Cup in 0-1 loss to Sweden

Canada missed a chance to tie the game on a penalty shot

Four-year-old boy assaulted at B.C. soccer game

It happened at a weekend tournament in Ashcroft

Two bear cubs saved near Revelstoke after mother hit by car

Conservation officers trapped the cubs and transported them to a wildlife sanctuary

Most Read