Home sales on the Multiple Listing Service® (MLS®) across BC are projected to breach the 100,000-unit milestone this year, making 2015 the third strongest year on record, according to a British Columbia Real Estate Assocation (BCREA) forecast issued November 10.
If sales do exceed 100,000 as expected, it will also be the first year since 2007 that BC home sales beat the 10-year average.
The report said that, after climbing 15 per cent in 2014 and nearly 20 per cent this year, BC sales are expected to decline 7 per cent to 93,700 units in 2016 – a level described as “remaining elevated” by the BCREA.
Cameron Muir, BCREA chief economist, said, “Less latent pent-up demand and gradual upward momentum of mortgage interest rates is expected to ease housing demand next year.”
The average home resale price in the province is projected to increase 10.2 per cent to $626,000 this year. The price growth rate is then forecast to slow to a 2.2 per cent rise next year, taking the average price to t $639,700 in 2016. This predicted trend is in line with the CMHC’s recent forecasts for Vancouver house prices in 2016.
The inventory of homes listed for sale has fallen to its lowest level since 2007, according to the report. Because of this, builders and developers have increased production, with total housing starts in the province projected to reach more than 30,000 units this year. This would be the highest level of production since 2008.
However, the BCREA predicts that capacity constraints and easing-off consumer demand will mean a decline of BC housing starts to 28,800 units in 2016. This is slightly at odds with CMHC predictions for Vancouver alone, which forecast a modest increase in housing starts in 2016, followed by a slowdown in 2017.