BC Home Sales to Reach 100,00 Units in 2015

The British Columbia Real Estate Association (BCREA) released its 2015 Third Quarter Housing Forecast Update today.

For only the third time in BC, Multiple Listing Service® (MLS®) residential sales are expected to reach 100,000 units in 2015. Housing demand has not been this robust since 2007 when 102,800 homes traded hands. A record 106,300 MLS® residential sales were recorded in 2005.  

“While rock-bottom mortgage interest rates and BC’s nation leading economic growth are underpinning demand, consumer confidence is the key driver of the near record activity,” said Cameron Muir, BCREA Chief Economist.  

Strong consumer demand has drawn down the inventory of homes for sale to their lowest level in nearly eight years. As a result, sellers’ market conditions are prevailing in many communities and causing home prices to be pushed higher. The average MLS® residential sales price in the province is forecast to climb 10 per cent to $626,000 this year.  An increase in new construction activity and a higher proportion of condominium purchases is expected to limit growth in the average home price to 2.5 per cent in 2016.

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Canadian Housing Starts

New home construction in Canada dipped 4.5 per cent from June to July to 193,000 units at a seasonally adjusted annual rate (SAAR).  The six-month trend in Canadian housing starts of 185,500 units SAAR was up slightly and is in-line with Canadian household growth. 

Housing starts in BC continued at a robust rate in July, rising to 36,500 units from an already strong 35,000 units SAAR in June.  On a year-over-year basis, housing starts increased 36 per cent with single-detached starts 3 per cent higher while multiple unit starts were up 54 per cent compared to this time last year. Year-to-date, total housing starts in BC are up 19 per cent. 

Looking at census metropolitan areas (CMA) in BC, total starts in the Vancouver CMA were up 44 per cent year-over-year in July due to a 60 per cent surge in multi-unit starts. In the Victoria CMA, the rate of new home construction more than doubled compared to July 2014. Total housing starts in the Kelowna CMA were up 63 per cent year-over-year as strength in multiple unit starts overcame a second consecutive month of declining construction of single units. Housing starts in the Abbotsford-Mission CMA jumped 47 per cent compared to this time last year on broad strength in both single unit and multiple starts.

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Canadian and U.S. Employment

Canadian employment was essentially unchanged in July as the economy created just 6,600 new jobs. The national unemployment rate remained unchanged for the sixth consecutive month at 6.8 per cent and total hours worked, which is strongly correlated with economic growth, increased 1.2 per cent compared to July 2014.  Employment is up 161,000 or 0.9 per cent compared to 12 months earlier. In BC, while employment was flat compared to June, full-time employment dropped by 15,700 jobs while part-time employment rose by a nearly equal number. The provincial unemployment rate ticked 0.2 points higher to 6 per cent. 
 
In the United States, payroll employment was up a healthy 215,000 jobs while the unemployment rate held steady at 5.3 per cent. Over the past three months, US job growth has averaged a robust 235,000 jobs per month. 

Copyright BCREA - reprinted with permission