If historical records are any indication, the dizzying rate of price growth in the Vancouver real estate sector is poised to cool down for the rest of the year as well as for approximately the first half of 2017, according to a recent analysis by the British Columbia Real Estate Association (BCREA).
In its Market Intelligence report released on June 23, the BCREA stated that despite the acceleration of price growth in Vancouver this year so far—above 20 per cent on a year-over-year basis for Q1 2016—the current developments (if not the numbers themselves) are not unprecedented.
“Periods of rapid price acceleration, defined as 20 per cent or higher year-over-year growth for the purposes of this report, are far from unusual in Vancouver. In fact, since 1981, there have been 46 months in which prices rose by more than 20 per cent on a year-over-year basis and 38 of those months occurred prior to 2010,” BCREA wrote.
“[After] an acceleration of home prices, the percentage change in growth tends to trend back to its long-run average growth rate,” the association added, citing historical data from previous periods of faster growth in Vancouver—namely, 1988-1989, 1993, 1995, 2006, 2009, and 2011.
Should the trends after these bursts of activity hold, BCREA said that a “gradual moderation” in 2016 and 2017 is highly probable.
“[Without] a major economic shock or significant change in housing policy, that conventional market dynamics of supply and demand will take hold and growth in home prices will likely trend lower over the next 12 months,” BCREA concluded.
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