(Black Press Media files)

Mortgage test, high supply to keep cooling B.C. housing prices in 2019, report says

The BC Real Estate Association says new lending rules are still affecting buyers

The mortgage stress test is expected to continue to put a damper on any major price increase in B.C.’s housing market throughout 2019, according to the B.C. Real Estate Association.

In a first quarter forecast update released Monday, the association said the test is expected to continue “constraining” housing demand this year.

READ MORE: B.C.’s skyrocketing real estate market will ‘correct’ in 2019, says analyst

The stress test, introduced at the start of 2018, requires all borrowers to qualify for a mortgage based on either the five-year benchmark rate or their lender’s actual rate plus two per cent, whichever is higher. The change applies to all mortgages, new or renewed, even if the down payment exceeds 20 per cent.

The average price of a home in B.C. stayed mostly steady, up just 0.5 per cent to $716,100, in the first quarter of 2019.

The association expects 80,000 units will sell by the end of the year, compared with 78,345 last year.

Although the province has seen five years of “above-trend economic growth,” and has the lowest unemployment in Canada – spurring on housing demand – the association said job growth will likely slow down in the coming years.

That shift will push down the province’s gross domestic product from 2.8 per cent to 2.6 per cent in 2019, leading to a slight downturn in housing demand.

That, mixed with the record number of new homes being built this year, will keep any housing shortages at bay.

READ MORE: Real estate board calls on Ottawa to revisit mortgage stress test


@katslepian

katya.slepian@bpdigital.ca

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Lavender hand sanitizer sale raises cash for Fraser Valley Health Care Foundation

Golf course and lavender farm partner up to support health care in the Fraser Valley

Man wanted for ramming police car and almost hitting bystanders in Abbotsford

Police say Lorne Guilbault ‘engages in high-risk criminal driving behaviour’

Wings and Wheels fundraiser ready to roll in Abbotsford this weekend

Unique collection of cars invading Tradex for drive-thru experiences on Saturday and Sunday

‘Unusual smell in water’ not a health concern, says City of Abbotsford

Odour is just temporary due to treatment-plant maintenance, city says

‘Agitated’ man pulls out knife on 3 people in Abbotsford

Witnesses sought for incident on Monday night near city hall

B.C. records new COVID-19 death, 85 more cases; Horgan calls on celebrity help

This brings the total number of active confirmed cases to 531 across the province

Teachers to get 2 extra days to prepare for students’ return, now set for Sept. 10

Students will first start with orientation and learn rules of COVID-19 classroom policies

High-volume littering at Cape Scott draws ire from hiking groups

Popular Vancouver Island hiking spot not closing, but frustration about crowding grows

SFU to drop ‘Clan’ varsity team name

The ‘Clan’ name is shortened from ‘Clansmen,’ and was introduced roughly 55 years ago

BCSPCA partners with Crime Stoppers

Many call in to the SPCA, but want to remain anonymous: Eccles

New Tory leader must build a strong team in Commons and for the campaign: Scheer

Scheer marked his final day in the House of Commons today as leader of the Opposition

B.C. to hire 500 more COVID-19 contact tracers ahead of fall

Contract tracers add an ‘extra layer’ in the fight against the novel coronavirus

Feds commit $305M in additional funds for Indigenous communities during COVID-19

Money can be used to battle food insecurity and support children and mental health

We were a bit tone deaf: Hobo Cannabis renamed Dutch Love after backlash

Hobo Cannabis has various locations in Vancouver, Kelowna and Ottawa

Most Read