BC home sales expected to drop this year, but by less than previously anticipated

VANCOUVER (NEWS 1130) – The British Columbia Real Estate Association thinks housing sales and prices will drop this year, but less so than it thought in January, signalling a possible reheating of the market.

The association predicts sales will dip 10 per cent in 2017 compared with last year, but prices will only drop one per cent before rebounding up five per cent next year.

Back in January, BCREA predicted a 14 per cent drop in sales and a five per cent price decline.

This update shows the market has largely shaken off the effects of policies aimed at cooling, such as the foreign buyers tax and stricter mortgage rules, according to BCREA chief economist Cameron Muir.

“All of those things had an impact on the marketplace, but this spring we’ve noticed it’s had a much shorter impact in terms of duration in the marketplace than anticipated. That’s why we’re seeing more sales, stronger consumer demand,” he says. “Those consumers who were sitting on the sidelines to see what the impact of these policy measures were going to have on the market place have decided that it’s time for them to step in.”

Residential sales should reach 101,000 units this year, down from the 112,200 sold in 2016 but far ahead of the 10-year provincial average of 84,700 units, the association says in a release.

BCREA expects sales to remain healthy this year because of a combination of a healthy economy, workers moving to the province, and millennial purchases.

The number of homes for sale has not matched demand, resulting in higher prices for condos and detached houses, Muir says.

The average residential home price across BC is forecast to decline 1.1 per cent to $683,500 this year, and increase 5.2 per cent to $719,100 in 2018, partly because of a greater focus on condo sales and sales outside Metro Vancouver.