After a sharp decline in sales volume and prices from January 2018 to the middle of this year, there are signs that the housing slowdown could be coming to an end.
Yesterday, the Real Estate Board of Greater Vancouver reported that MLS residential sales rose 15.7 percent in its territory in August over the same month last year.
Today, the B.C. Real Estate Association forecast annual MLS residential sales by the end of this year will be off just five percent from the 78,505 units sold in 2018.
Next year, the association is predicting an 11 percent increase in sales, which would put them slightly below the 10-year average.
“B.C. markets are showing signs of recovery after nearly a year and a half of policy-induced declines,” BCREA deputy chief economist Brendon Ogmundson said in a news release this morning. “We expect that recovery to continue into next year, with home sales normalizing around long-term averages.”
The BCREA has been a frequent critic of the B-20 mortgage-stress test, which was ordered by the Office of the Superintendent of Financial Institutions at the start of last year.
It requires lenders to qualify prospective borrowers only if they're able to repay mortgages at an interest rate 200 basis points above the contracted amount.
"The erosion of affordability caused by the B-20 stress test has created near recession-level housing demand despite the province boasting the lowest unemployment rates in a decade," BCREA chief economist Cameron Muir said in April.
In addition, four new and increased NDP government housing taxes in 2018 coincided with a sharp slowdown in the market.
In the REBGV, the MLS home price index was off last month by 8.3 percent from the same month in 2018.
Ogmundson anticipates that across the province, there will be a 2.4 percent decline in the MLS benchmark on a year-over-year basis in 2019, followed by a three percent rise in 2020 to $718,000.