Home sales in the Greater Vancouver Area continued to fall in April as demand remained weak.
A total of 1,829 homes were sold in the region last month, a 29.1 per cent decrease from the 2,579 sales in the same month last year. However, there was a 5.9 per cent increase in sales from the 1,727 homes sold in March, according the Real Estate Board of Greater Vancouver (REBGV).
The real estate board blamed government intervention for continuing to hinder sales activity.
“The federal government’s mortgage stress test has reduced buyers’ purchasing power by about 20 per cent, which is causing people at the entry-level side of the market to struggle to secure financing,” said REBGV President Ashley Smith in a release Thursday.
“Suppressing housing activity through government policy not only reduces home sales, it harms the job market, economic growth and creates pent-up demand.”
There has been a growing chorus of calls for mortgage stress test rules to be revisited so that they can become more flexible. The Office of the Superintendent of Financial Institutions introduced its B-20 guidelines, which applies a stress test to uninsured mortgages, in January 2018, and has been partly credited with cooling the country’s once-hot housing markets.
The continued slowdown in sales last month came as more inventory flooded the market. Indeed, there were 5,742 newly-listed homes for the region in the month, a 16- per-cent increase compared with March when 4,949 new properties were up for sale. There are 14,357 homes currently up for grabs, which is a 46.2 per cent increase from the same month last year.
“There are more homes for sale in our market today than we’ve seen since October 2014,” Smith said. “This trend is more about reduced demand than increased supply.”
While Vancouver housing market remains one of the most expensive in the country, home prices in the region continued to fall, with the composite benchmark price down 8.5 per cent year-over-year in April to $1,008,400.