(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

Clearwater Secondary School girl’s soccer team off to good start

CSS made second place in a tournament of 15 teams

Convicted animal abuser to return to B.C. court May 21

Catherine Jessica Adams is facing a breach of probation charge

Clearwater Fire Department to reach 50-year milestone

A look at the organization through the decades

Emergency exercise to test community’s disaster response

Mock carbon monoxide leak emergency exercise will be taking place on May 28

Rescuers finally persuade Eiffel Tower climber to come down

The official said the man was ‘under control and out of danger’ on Monday night

B.C. sends 267 firefighters to help battle Alberta wildfires

Out of control fires have forced evacuations in the province

LETTER: Fletcher ‘blurs reality’ on B.C. union public construction

Bridge, highway projects awarded to companies, not unions

Killer of Calgary mother, daughter gets no parole for 50 years

A jury found Edward Downey guilty last year in the deaths of Sara Baillie, 34, and five-year-old Taliyah Marsman

Terrace hospital’s business plan approved

Health Minister’s announcement opens door to construction phase

Federal government funds millions to help B.C. police spot drugged driving

Many police departments have expressed wariness about using the only government-approved roadside test

Judge: Mississippi 6-week abortion ban ‘smacks of defiance’

The new law would prohibit most abortions once a fetal heartbeat can be detected

Oil companies, 24-cent gap between B.C., Alberta to be focus of gas price probe

Premier John Horgan called the spike in gas prices ‘alarming’

Motorcycle deaths spike 50% since 2017

Riders were most likely fatally crash on the weekends compared with the rest of the week

Most Read