A surge of buying activity – and nowhere near enough supply – caused condo prices in Metro Vancouver to soar 20.2 per cent year over year in 2017’s fourth quarter.
The prospect of the new mortgage “stress test” coming into play January 1 caused buyers to speed up their home-buying plans in the final quarter of 2017. The strict new rules now require home buyers to qualify for their mortgages at a markedly higher interest rate than the rate they will pay – which reduces purchasing power by up to 20 per cent.
During the same period, the aggregate home price in Greater Vancouver increased 8.2 per cent year-over-year to $1,267,769.
We do not anticipate a corresponding drop in condo market activity in 2018, with the new qualification rules now in place. The brokerage anticipates that many buyers who might have been able to purchase a house or townhome will now be competing for a limited number of condos, due to their reduced purchasing power.