Home sales are dropping in Vancouver as listings rise, with the local real estate board blaming policy changes for restricting potential buyers.

A total of 1,727 homes were sold in the Vancouver region in March, down 31% from a year earlier, though up 16% from February, the Real Estate Board of Greater Vancouver has reported. However, the total number of home sales was the lowest for the month since 1986.

The benchmark composite index price for a Vancouver home is C$1.01m (£579,000), down 7.7% from a year earlier and down 0.5% from the previous month. The real estate board blamed policy changes for restricting purchases, saying they “sideline potential home buyers in the short term.”

New rules from the federal banking regulator, which took effect last year, tightened access to mortgage financing by imposing stress tests on borrowers to ensure they can make monthly payments at higher interest rates. The Vancouver region has now seen a huge rise in home listings - there are 12,774 homes on the market now, 52.4% higher than a year ago and 10.2% higher than a month earlier.