After a near-record-setting year for BC real estate sales in 2015, in which more than 100,000 homes were sold, the number of transactions this year is expected to drop by 6.3 per cent to a still-high 96,100 units, according to a British Columbia Real Estate Association (BCREA) forecast released January 28.
The association added that it expected provincial economic conditions to “remain robust” and support high levels of housing demand.
It added, “Strengthening economic conditions at home and abroad are expected to bolster housing consumption activity in 2017. BC Multiple Listing Service® (MLS®) residential sales are forecast to increase two per cent to 98,000 units next year.”
The report said that the significant rise of new construction activity and an anticipated boost in new listings in the spring are “expected to ease some of the upward pressure on home prices.”
It said, “After rising 12 per cent in 2015, the average MLS® residential price in the province is forecast to increase 6.4 per cent to $677,200 this year and a further 4.2 per cent to $705,300 in 2017.”
A price rise of 6.4 per cent, coupled with a fall in transactions of 6.3 per cent, would result in a total sales dollar volume drop of just 0.3 per cent compared with 2015, predicted the report.
For Greater Vancouver, the association predicted a drop in total sales of 8.2 per cent in 2016, but a rise in average prices of 8.6 per cent compared with last year – a figure that is consistent with a recent forecast by Royal LePage.
The report observed that the BC economy as a whole has yet to be negatively affected by economic concerns elsewhere in Canada, and that this will continue to support the housing market.
“The BC economy proving resilient to the collapse in oil prices and weak commodity demand. Consumer spending through retail sales is growing at its fastest rate in a decade, while employment in the province increased by over two per cent during the latter half of 2015, with a marked increase in full-time jobs. Tighter labour market conditions have also led to a four per cent rise in average wages.
“While BC exports have yet to fully realize the competitive advantage of the lower dollar, tourism has experienced significant gains.”
However, the BCREA added that there were significant variances between different parts of the province.
The report said, “Market conditions are not consistent around the province. Regional economies with a heavy reliance on commodities have demonstrated weaker housing market conditions, while larger urban areas have experienced declining inventories and strong sellers’ market conditions. Indeed, Vancouver and the Fraser Valley are exhibiting accelerating market conditions.”