Vancouver home buyers took out smaller and fewer mortgages after the government imposed measures to cool the province’s fiery housing market.
The average size of a new mortgage in Vancouver was $517,415 in the first quarter of this year, compared with $553,719 a year earlier, according to a TransUnion report released on Tuesday.
Not only were mortgages smaller, the number of mortgage originations in the city dropped to 6,226 from 9,162 over the same time period.
“It is slowing, for sure,” said Matt Fabian, research director for the credit-monitoring firm.
In British Columbia, the average size of a new mortgage was $375,126 in the first quarter, compared with $384,430 a year earlier, and mortgage originations fell by 20 per cent to 25,734.
A year ago, the B.C. government slapped a 15-per-cent tax on foreign home buyers in the Vancouver area, immediately slowing home sales in the region. In recent months, sales activity has picked up, and the average price of a detached house in the Vancouver region was $1.7-million in July.
The Ontario government also imposed a similar tax on foreign home buyers in April in an effort to throw a damper on soaring real-estate prices in the Toronto area. The average selling price of a detached house in the city has also topped $1-million.
The taxes in Ontario and British Columbia, as well new federal mortgage insurance requirements set out by Ottawa last year, were designed to weed out real-estate speculators, make housing more affordable and ensure Canadians could handle their mortgages.
In addition, the share of homeowners delinquent on their mortgage payments remained below 1 per cent, according to the TransUnion report.