The Teranet-National Bank House Price Index for April has been released, which shows that Canadian house prices were flat in April with annual growth falling to 1.2%:
Across the three major markets, values fell by 0.4% in Vancouver in April and by 0.2% in Montreal, whereas values rose by 0.3% in Toronto.
In the year to April, Vancouver values fell by 2.8%, whereas they rose by 3.3% in Toronto and by 5.1% in Montreal.
Since peaking in July 2018, Vancouver’s house prices have fallen by 4.7%.
Meanwhile, the Real Estate Board of Vancouver reports that sales volumes have crashed and blames macro-prudential curbs by the federal government:
Decreased demand continues to allow the supply of homes for sale to accumulate across the Metro Vancouver* housing market.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 1,829 in April 2019, a 29.1 per cent decrease from the 2,579 sales recorded in April 2018, and a 5.9 per cent increase from the 1,727 homes sold in March 2019.
Last month’s sales were 43.1 per cent below the 10-year April sales average…
“Government policy continues to hinder home sale activity. The federal government’s mortgage stress test has reduced buyers’ purchasing power by about 20 per cent, which is causing people at the entry-level side of the market to struggle to secure financing..
The exodus of Chinese capital has also played a role:
Vancouver home prices have skyrocketed in recent years thanks in part to an influx of foreign capital, mostly coming from mainland Chinese buyers.
The high-end market has been hit especially hard as foreign capital dries up.
Similar forces are at play across Sydney and Melbourne.