Weak demand continues to pull down the Vancouver housing market’s sales volume, according to new figures from the Real Estate Board of Greater Vancouver (REBGV).
Overall transactions declined by 29.1% annually in April, down to 1,829 sales. This is despite a gain of 5.9% from the 1,727 deals in March.
The region’s inventory saw the addition of 5,742 new for-sale listings last month, up by 16% from the 4,949 new listings in March.
Overall supply in Greater Vancouver was 14,357 homes for sale, around 46% greater than the supply seen on April 2018.
“There are more homes for sale in our market today than we’ve seen since October 2014,” REBGV president Ashley Smith said, as quoted by BNN Bloomberg. “This trend is more about reduced demand than increased supply.”
The REBGV pointed at B-20, especially the mandated stress testing, as the main factor behind the region’s feeble activity.
“Suppressing housing activity through government policy not only reduces home sales, it harms the job market, economic growth and creates pent-up demand,” Smith noted.
“The federal government’s mortgage stress test has reduced buyers’ purchasing power by about 20%, which is causing people at the entry-level side of the market to struggle to secure financing.”
In its recent report, Zoocasa found that an income of at least $205,475 is needed to buy a Vancouver home at the benchmark price ($1,441,000), assuming a 20% down payment at a 3.75% mortgage rate on a 30-year term.
Condos have joined the price growth trend, as well. An income of at least $93,527 is required to purchase a benchmark unit ($656,900).
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