Residential unit sales on the Multiple Listing Service® (MLS®) in BC are forecast to dip 9 per cent to 93,800 units this year, and a further 2 per cent to 92,000 in 2009. The combination of eroding affordability and weaker economic growth are trending home sales away from historically high levels.
The housing recession in the US and belt tightening by US consumers is negatively impacting the forestry and tourism. As a result, economic growth in the province is forecast to decline from 3.1 per cent in 2007 to 2.5 per cent in 2008. However, BC economic growth is expected to exceed the national average by a wide margin, contributing to elevated inter-provincial migration and relatively robust employment growth.
A marked increase in the inventory of homes for sale is providing more choice for homebuyers and reducing the chances of multiple bids on the same property, providing less upward pressure on home prices. After climbing 12 per cent to $438,975 in 2007, the average MLS® residential price is forecast to increase 9 per cent to $479,000 this year, and a further 4 per cent to $499,000 in 2009.
Regional housing market differences will persist; however, the gap is expected to narrow. Average home prices in the Okanagan, Kootenays and Kamloops are forecast to climb a more modest 8-14 per cent this year as weaker demand from Albertans and investors is expected. In addition, a strong Canadian dollar and falling home prices south of the border are drawing the attention of some recreation homebuyers away from BC.
Most housing markets in the province will enter balanced conditions this year. After six years of a strong sellers’ market, it is welcome relief for many homebuyers. BC’s housing markets continue to be underpinned by robust employment growth, elevated net immigration and strong consumer spending. In addition, mortgage rates are stable, with some downward pressure expected before year end.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
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