By Laine Mitchell (Twitter: @Laine_Mitchell)

Drop in Drayton Valley home sales blamed on mortgage stress test

Jul 2, 2018 | 7:43 AM

A decline in residential sales in Drayton Valley is being seen by some as a result of mortgage rules brought in this past January. 

The newest numbers show there were 28 sales during the first six months of 2018, a 56 per cent drop compared to the same time last year. 

Brandon Aarts, a realtor in Drayton Valley, attributed the slowdown to mortgage policy changes. 

In January, new rules brought in a so-called “stress test” for mortgage borrowers, where their finances are tested to make sure they would be able to pay higher rates.

“That has definitely played a significant role in the drop in home sales,” Aarts said. “The price of oil is much higher than the middle of 2017, however the new rules have made it harder for some to buy a home even with a stronger economy.” 

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The mortgage rules typically reduce a buyer’s purchasing power by as much as 20 per cent, meaning that many buyers have had to purchase less-expensive homes or stay out of the market entirely.

The average price for a home sold up to June of this year was $268,507, a nearly $30,000 price average decline from the first six months of 2017.

So far in 2018 there has been one foreclosure sold.