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Mortgage stress test to blame for last year’s 25% drop in home sales, says BCREA

By Tyler Orton for Business in Vancouver

The B.C. Real Estate Association (BCREA) says the mortgage stress test introduced by Ottawa one year ago is “largely to blame” for a 24.5% decline in home sales across the province last year.

Data released January 15 reveals the Multiple Listing Service (MLS) recorded 73,345 residential unit sales in 2018 — down significantly from the 103,758 units sold the previous year.

The new numbers put the province below its 10-year average of 84,800 unit sales.

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“The sharp decline in affordability caused by the B20 mortgage stress test is largely to blame for a decline in consumer demand last year,” BCREA chief economist Cameron Muir said in a statement.

The federal government introduced the stress test in January 2018 as a means to cool white-hot markets in Vancouver and Toronto.

The B.C. government followed up the next month by raising the 15% foreign buyer tax to 20%, and introducing the tax beyond the original boundaries of Metro Vancouver as a means to address the affordability crisis plaguing many regions on the West Coast.

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