A real estate market outlook released this week says hopes for a better year were "dashed early" as political measures put prospective buyers on the sidelines.
The report from Central 1 Credit Union shows a dip in sales in the first few months of 2019, and predicts the trend will continue for the near future.
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The number of annual sales is expected to be the lowest since 2013, the report says.
Central 1 blames policies including federal mortgage rules, which mean would-be buyers can no longer qualify for enough financing to buy a home. Others, the report says, are waiting until declining prices settle.
"Sluggish market conditions are driving prices lower and the median provincial home price is forecast to decline for the first time since 2012," the report says.
It predicts the median home price in B.C. will fall 4.1 per cent this year, to $515,000. The decline is being driven by markets affected by speculation and foreign buyer taxes including Metro Vancouver and Kelowna.
"Given the media spotlight, it is no surprise that Metro Vancouver is the epicenter of the downturn," the report reads.
"As the highest priced metro housing market in the country, the region was particularly affected by the tightened mortgage qualifying criteria, which effectively cut up to 20 per cent purchasing power."
Mortgage stress tests mean buyers need a larger down payment to make a purchase, and many have struggled to bridge the gap.
At the same time, the provincial tax on foreign buyers has pushed some to other Canadian markets, and sales have dipped more than 40 per cent in Metro Van since the end of last year, the report says.
Less activity in the Metro Vancouver market is also affecting the purchase of recreational and retirement purchases in other parts of B.C., Central 1 says.
And a sluggish Alberta economy means fewer people are buying properties in B.C.'s Interior.
Smaller markets remain steady, and demand up north is growing due to jobs created by pipeline construction and liquefied natural gas, the credit union says.
The report forecasts a "mild pick up" later this year, and suggests demand in B.C. will rise in the next two years.
Still, it suggests "home sales remain marshmallow soft despite re-bounding momentum," and stagnation is expected for the next three years.
The reports says the slump could hit the construction and trades industries hard as developers hold off on starting any construction until things turn around.
In the meantime, realtor Ben D’Ovidio says buyers who find the home they are looking to live in long term should still consider making an offer.
"It fits your budget, you're pre-approved, you can afford it and you love it, then you won't regret it,” he said. “If you're holding it...for four, five, six or 10 years, it's irrelevant anyway."
On the flip side, buyers determined to buy at the lowest possible price can probably afford to wait.
With files from CTV Vancouver's Ben Miljure
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