Home sales in B.C. dropped by a quarter in 2018, with analysts blaming tighter mortgage restrictions.

According to the B.C. Real Estate Association, about 78,000 home sales were recorded last year, compared to roughly 103,700 the year before.

B次元官网网址淭he sharp decline in affordability caused by the B20 mortgage stress test is largely to blame for decline in consumer demand last year,B次元官网网址� said Cameron Muir, the associationB次元官网网址檚 chief economist, in a news release Tuesday.

The federal government enacted strict mortgage rules on Jan. 1, 2018, including a new stress test for home buyers as a way to cool off the hot real estate market.

But the dip in the number of sales had no dent in the average price of a B.C. home, which increased by 0.4 per cent last year to $712,508.

Nationwide, excluding Greater Vancouver and the Greater Toronto Area B次元官网网址� the most active and expensive markets B次元官网网址� the average annual sale price was just under $375,000.

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B.C.B次元官网网址檚 dip in sales mirrored the rest of the country, which saw the weakest annual sales since 2012.

B次元官网网址淭he stress-test has weighed on sales to varying degrees in all Canadian housing markets and will continue to do so this year,B次元官网网址� Canadian Real Estate Association president Barb Sukkau said in a news release.

But while the provinceB次元官网网址檚 average housing price increased, Canada overall faced an average decrease of 4.9 per cent.

BMO Capital Markets senior economist Robert Kavcic took the drops to be signs that the market has softened and B次元官网网址渢he headline-grabbing drama in recent years has largely run its course.B次元官网网址�

B次元官网网址淚tB次元官网网址檚 probably not a stretch to think that the Canadian housing market has entered into a prolonged period of relative stagnation, where sales are roughly flat and prices no longer outrun inflation,B次元官网网址� he wrote in a note to clients.

B次元官网网址淭his would be a big change compared to conditions weB次元官网网址檝e experienced over the past decade, especially in Toronto and Vancouver, but itB次元官网网址檚 not at all uncommon when looking back through history and across different markets.B次元官网网址�

Vancouver, he pointed out, finished the year at the lowest seasonally adjusted level since the Great Recession, leaving buyers in control.

Looking ahead, TD Bank economist Rishi Sondhi predicted declines seen in December will weigh on residential investment and overall economic growth across all markets.

B次元官网网址淥ur forecast calls for Canadian sales to basically tread water after 2018B次元官网网址檚 plunge, as the impact of rising borrowing costs and tighter lending conditions are countered by strong population gains and on-going job growth,B次元官网网址� Sondhi said in a note to investors.

B次元官网网址淪till, the level of sales will remain relatively low compared to recent years.B次元官网网址�

With files from Tara Deschamps, The Canadian Press

ashley.wadhwani@bpdigital.ca
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