Every month, groups representing real estate agents are reporting lower sales compared to the previous year.
March was no different, with the number of transactions recorded through the Multiple Listing Service falling 23 percent in B.C. over the same month of 2018.
According to the B.C. Real Estate Association, the dollar volume fell by even more—27.1 percent—or $3.9 billion.
That amounts to a great deal less commission income for agents.
And once again, the BCREA has pointed the finger at a federal mortgage policy as a major contributing factor.
The B-20 test, introduced last year by the Office of the Superintendent of Financial Institutions, requires lenders to test a borrower's ability to repay a mortgage if interest rates were 200 basis points above the agreed-upon rate.
"The erosion of affordability caused by the B-20 stress test has created near recession-level housing demand despite the province boasting the lowest unemployment rates in a decade," BCREA chief economist Cameron Muir said in a news release.
Last month, the BCREA said that the mortgage stress-testing rules were likely not sustainable in the long run.
The stress test was introduced in response to high debt-to-income levels.
Metro Vancouver leads the country in that regard at 242 percent, according to the Canada Mortgage and Housing Corporation, which is the federal housing agency.
Last year, superintendent of financial institutions Jeremy Rudin said that the oversight of mortgage underwriting standards "gives us a tool that we need to ensure the safety and stability of Canadian banks and the Canadian financial system".
"What it doesn’t give us is a dial we can turn up and down to try to get particular outcomes in the housing market," Rudin added.
Muir noted in today's news release that the B-20 stress test "is now creating pent-up demand as many would-be home buyers are forced to wait on the sidelines".
"Unfortunately, new home construction is slowing as well, which will likely lead to another housing supply crunch down the road," Muir stated.
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