(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

Choir leader’s selfless work wins her Castlegar Citizen of the Year

Christina Nolan has grown the community choir into a strong and vibrant asset for the city

Water main maintenance ongoing in South Castlegar and Blueberry

Project will take two weeks — city says there should not be any service disruptions

Downtown businesses want you to love them this weekend

Third annual event encourages people to shop in their own community.

Police investigating man’s death in Winlaw

Foul play not established, but major crimes unit is investigating

Grand Forks woman assaulted in home invasion

The incident took place Wednesday morning

Police say it’s “impressive” no arrests were made after Raptors celebrations

Toronto will play the Western Conference champion Golden State Warriors next

Social media giants in hot seat as politicians consider regulations in Ottawa

Committee members will also grill representatives from Facebook, Twitter

Wildfire crews watching for dangerous wind shift in High Level, Alta.

The Chuckegg Creek fire is raging out of control about three kilometres southwest of the town

UN urges Canada to take more vulnerable Mexican migrants from Central America

The request comes as the United States takes a harder line on its Mexican border

Mistrial declared in Jamie Bacon murder plot trial

Bacon was on trial for counselling to commit the murder of Person X

B.C. VIEWS: Money-laundering melodrama made for TV

Public inquiry staged to point fingers before 2021 election

Canadian homebuyers escaping high housing costs by moving to secondary cities

In British Columbia, exurbs have grown in the Hope Valley and Kamloops

Feds lay out proposed new rules for voice, video recorders in locomotives

Transport Canada wants to limit use of recorders to if a crew’s actions led to a crash

Most Read