Population growth and a strong economy are expected to underpin solid housing demand through next year, according to the British Columbia Real Estate Association’s first quarter housing forecast.
“Solid fundamentals continue to underpin housing demand in the province," said Cameron Muir, BCREA Chief Economist. "International trade, population growth and consumer confidence will be key economic drivers this year."
Net migration to the province exceeded 50,000 individuals during the first three quarters of 2016, the highest level since 2008 and a 50 per cent increase from the previous year,” BCREA noted.
British Columbia home sales reached 112,209 in 2016; they’re forecasted to fall 14.1% this year to 96,345 before settling to 95,770 in 2018.
The average price in 2016 was $691,144 (+8.6%) and is expected to fall 4.9% to $657,026 this year before increasingly slightly to $666,657 in 2018.
“The BC economy is forecast to expand by 2.5% this year and a further 2.7% in 2018. Employment growth is also expected to remain on a solid footing, supported by international trade, strong population growth and consumer spending,” BCREA said in its forecast.
Unsurprisingly, the association is forecasting delayed home purchases due to the most recent mortgage rule changes.
“New federal rules requiring low-equity homebuyers to qualify at the higher posted five-year mortgage rate, rather than their negotiated rate, will delay home ownership for many potential first-time buyers,” it said.