The B.C. government measures aimed at cooling the housing market of the Vancouver region will have a total effect in 2019, setting the stage for the continuation of slow sales.
Numerous provincial policies, combined with the federal stress test that make it harder for borrowers, have already had an important psychological effect on the Vancouver area, said Bryan Yu, an associate economist at Central 1 Credit Union. The Canadian banking regulator implemented a stress test on January 1, 2018, which made it difficult for buyers to qualify for mortgages.
Sales in the Vancouver region decreased 23% in 2018 compared to 2017. The trend of very different expectations between buyers and sellers is expected to extend until 2019, he said Mr Yu, which predicts regional sales could decrease by 0.8% in 2019 compared to 2018.
"We are going to see an ongoing gap between what sellers are willing to sell and what buyers can and are willing to hire properties," he said in an interview. "It reduces a lot to a low sales environment".
The NDP provincial government will start collecting what is called the speculation tax in 2019. The annual tax is mostly aimed at residents outside the province that have properties in the urban markets of British Columbia. These assets are usually secondary homes or holiday properties that are not rented.
The B.C. The government will also begin to impose an annual discount that will target property owners valued at more than $ 3 million. The speculation tax and the new desktop are part of a comprehensive housing policy package that was originally published in the BC NDP budget in February 2018.
As long as the affordable crisis persists, average prices for single-family homes, homes and town houses in the Vancouver region could be reduced by 3 percent in 2019 compared to 2018, forecasts by Mr. Yu. He adds that the trend of weak sales and flat or slightly lower prices could continue until the year 2020 and 2021.
In August 2016, the previous liberal government of BC introduced a 15 percent tax on foreign buyers in the Vancouver area, contributing to the fall of the unified housing segment during the in the second half of 2016 and at the beginning of 2017. After a scrupulous recovery in the housing market in 2017, the BC NDP government lifted the buyers of foreign buyers to 20% in February 2018 and also expanded L & Tax on other urban markets in the province.
The real estate market in the Vancouver region faced "intense pressure" during much of 2018, compounded by the rise in mortgage rates, said Montreal's senior economist at Montreal Bank , Sal Guatieri.
"The demand has weakened so much that the few buyers now are able to obtain some seller price concessions," wrote British economist Royal Bank of Canada, Craig Wright and Robert Hogue, in one research note
Even so, Mr Yu said the British Columbia economy is expected to stay strong over the next three years, while the unemployment rate has to remain relatively low and there are no signs that point towards a global economic impact.
"House prices are eroding, but they will not slow down," he said. "We have achieved a very smooth place in the housing sector, and this is really an event induced by politics. The labor market is strong. We are not in an economic recession or in a crisis of confidence."
The average price of single-family homes sold in western Vancouver reached 3,218,333 dollars in November 2017. The average price declined by 11 percent since then, but is still outside of # 39. ; reach of most potential buyers of $ 2,860,000.
The property and stately homes market showed signs of resistance at the beginning of 2018, although it was eased notably in recent months. The price of buyers sold to the Grand Vancouver was $ 690,190 in November, 7.7% less than in April.
However, even entry-level condos are still too expensive for many buyers for the first time, said Paul Kershaw, founder of Generation Squeeze, a lobbying group formed to represent the views of Canadians in the years 40 and minors. "The property prospects of a home for a younger demographic population have been damaged in British Columbia than in any other province," he said.
The rapid rise in real estate prices from mid-2013 to mid-2016 in the city of Vancouver motivated many residents to move to other parts of the province, helping to raise prices in markets such as Victoria and Sunshine Coast, he said Mr. Kershaw.
An analysis of Generation Squeeze found that the house property rate in British Columbia for residents between 35 and 44 years was 67% in 2016, compared to 78 percent in 1977.
"We have indeed had an earthquake in the real estate sector of B.C.," said Mr. Kershaw. "It's not just a Vancouver problem because during the last decade it has spread to the suburbs and has gone to other urban centers like Victoria. Even if you save enough for an initial payment Hard work is not compensated as before. "