Vancouver Canada’s March 2019 home sales dropped to its lowest levels since March 1986. A startling -31% drop in sales from one year ago but a +16% increase in sales from February 2019 got everyone’s attention at the Real Estate Board of Greater Vancouver.
Vancouver’s Real Estate Board pointed its collective finger at the government’s recent changes designed to restrict home purchases by tightening access to mortgage financing. Vancouver’s federal banking regulator has added “stress tests” as a way to make sure that borrowers can make monthly mortgage payments at now higher interest rates.
Despite a benchmark sales price of $760,000, a decrease of -7.7% from one year ago and a decrease of -0.5% in March of this year while being the most expensive sales price in the country by far, monthly mortgage costs are still higher than last year due to higher interest rates. And the results of these higher interest rates and added “stress tests?” An increase in listings of +52% from one year ago and a +10.2% increase in listings from just last month.
The board of the Real Estate Board of Greater Vancouver told the National Mortgage News that the government’s policy on tightening access to mortgage financing is“…sidelining potential home buyers.”
Simultaneously, housing starts in Vancouver have had back-to-back drops while its financing regulations for new homebuyers are the most stringent in Canada. Housing starts decreased by -29% in January 2019 and by -21% in February. The results? The least housing starts in Vancouver since 2002.
Meanwhile, housing starts throughout the country are beginning to rebound a bit. This rebound reflects changing demographics (more Millennial buyers), population growth and increasing household formation.
Unlike Vancouver’s housing sales statistics, Montreal home sales in March 2019 increased +1% from one year ago. And, according to the Quebec Professional Association of Real Estate Brokers, sales prices of single-family homes in Montreal increased +5% and condominium sales prices increased +3% from one year ago.