(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.

Just Posted

Sooke cannabis report does little to answer production questions

Council is trying to get ahead of the issue

Saanich woman runs marathons to make dreams come true

Hempler gutted her way through 122 kms with minimal breaks, to support Help Fill a Dream Foundation

Tsartlip canoe team pulls for international glory in Australia

Geronimo Canoe Club paddles to Victoria to kick-start fundraising

Average housing prices would have to drop by $413,000 for Victoria to become affordable

Alternatively, salaries need to increase to $134,000 per year, more than double current levels

Victoria Weekender: What’s happening this weekend, June 15-16

Car Free YYJ, a barber battle and an Outdoor Discovery Day

Bombers down B.C. Lions 33-23 in season opener

Former Lion Andrew Harris leads Winnipeg with 148 rushing yards

Northern B.C. family remembers murdered Indigenous woman with memorial walk

Still no closure for Ramona Wilson’s family 25 years later

Monkey spotted on late-night jaunt in Campbell River

Conservation officers also apparently looking for cougar in the area

B.C. university to offer mentorship program for former youth in care

Students using the provincial tuition waiver program will soon be able to form a community at KPU

Cyclists competing in one of the toughest bike races on the planet pass through Fernie

Divide riders looking strong as they finish first leg of 4160 km race

You might not know these B.C. records are public

Hired a lawyer to file a civil claim? Those are published online

B.C. bus driver loses case to get job back after texting while driving full bus

An arbitator ruled that Tim Wesman’s phone usage was a “a reckless disregard for public safety”

Revamped B.C. Lions set to battle veteran Winnipeg Blue Bombers

The Lions’ first test of the season will be a big one

Most Read