The British Columbia Real Estate Association (BCREA) has come out with their first quarterly release and anticipates a slow down in demand for 2018 and 2019. Here is a brief summary:
Multiple Listing Service® (MLS®) residential sales in the province are forecast to decline 8.6 per cent in 2018. A further decline from 2017 and 2016, but 2018 sales are expected tp remain above the 10 year average.
Strong employment growth, consumer confidence and favourable demographics have been highly supportive of housing demand over the last four years. However, slower economic growth, tougher mortgage qualification rules, and a rising interest rate environment are expected to slow the pace of housing demand over the next two years.
The 5-year qualifying rate is forecast to rise 35 basis points to 5.49 per cent by Q4 2018, and another 21 basis points to 5.70 per cent by Q4 2019. With home prices already at an elevated level, BC households are more vulnerable to rising interest rates.
The supply of homes for sale continues to trend at or near decade lows in most BC regions. There are however over 60,000 homes now under construction in the province, well above the previous peak of 45,000 units recorded in 2008. In Metro Vancouver, over 42,000 units are in the pipeline, 56 per cent more than recorded in 2008. Slowing consumer demand combined with a surge in new home completions over the next several quarters will create more balance in the housing market and produce less upward pressure on home prices.
The average MLS® residential price in the province is forecast to increase 6.0 per cent to $752,000 this year, and a further 4.0 per cent to $781,800 in 2019.
To read the full report click here.
For updates and reports relating to specific Downtown neighbourhoods and Vancouver Downtown Condos, or other Vancouver areas click here.