Home prices are set to rise across BC next year, including Vancouver and the Fraser Valley, but at a slower rate than in 2015, according to a report issued October 26 by the Canada Mortgage and Housing Association (CMHC).
The average Greater Vancouver home price is expected to increase by nine per cent overall year-over-year in 2015 to $887,600, but more modest price growth of three per cent to $914,100 is expected in 2016. The CMHC forecasts a further 2.1 per cent growth in 2017 to $933,200.
Total Multiple Listings Service® (MLS®) sales in the Fraser Valley are forecast to reach 19,300 transactions in 2015, before edging lower in 2016 and 2017. Average MLS® home prices are expected to rise 8.8 per cent in 2015 and, like Vancouver, see smaller increases in 2016 and 2017 as higher mortgage rates and the supply of homes for sale grows over the next two years.
Home sales in Greater Vancouver are set to reach 41,800 by the end of 2015, the highest level in ten years, before easing back to 38,400 in 2016 and 37,400 in 2017. The CMHC added in its report that these levels would still be well above the 10-year average.
CMHC chief economist Bob Dugan said housing market activity in BC has benefited from sliding energy prices, record low mortgage rates and a falling Canadian dollar.
However, Dugan said the CMHC expected this “counterbalancing effect" to diminish over 2016 and 17.
The CMHC also predicts a “stable but elevated pace of new home construction” in 2016 and 2017, with Vancouver CMA housing starts forecast at 20,700 and 20,100 units, respectively.
“Demand for homes in Vancouver is well supported due to a strong labour market, low mortgage rates and steady population growth,” said Richard Sam, CMHC principal, market analysis for Vancouver.
“Solid fundamentals will keep activity above the long-term average through 2016 and 2017.”