Home sales in BC are forecast to increase by almost 11% next year, with demand expected to “normalize” into 2020, as sales and listings find a balance.
That’s the latest insight from the BC Real Estate Association (BCREA), who released the findings today as part of its fourth-quarter housing forecast.
According to the report, the upward trend comes after what experts called a “slow start” to 2019.
This, they said, was due in part to things like slower economic growth in BC as well as “headwinds emanating from the South, along with the dampening effects of federal mortgage rules and provincial tax policy.”
However, real estate activity has embarked on a sustained upward trend since the spring, and home sales are “simply returning to trend after sustaining a significant shock, rather than returning to the heights of recent years.”
Still, despite what the BCREA called “significant improvement” in market activity, “sluggishness out of the gate will likely mean that provincial MLS sales decline for a third consecutive year in 2019 to 77,100 unit sales.”
That said, the BCREA still expects markets across BC “to post rising sales in 2020 with total provincial MLS sales up 10.9% to their long-run average of about 85,500 units.”
And as demand “normalizes,” the BCREA said the accumulation of resale inventory has reversed course in many markets around the province.
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“For most markets this will mean price growth that’s in-line with inflation, though for some supply-constrained areas we are forecasting strong price growth,” the BCREA said. “This is particularly true in the parts of Northern BC most directly impacted by massive LNG Canada investment.”
In addition, “unexpectedly strong new home construction activity continued in 2019 – particularly in Metro Vancouver,” the association said.
Total provincial housing starts are forecast to rise close to 8% this year, surpassing the 40,000-unit mark for a third consecutive year and reaching a record high of 44,000 total starts.
This elevated pace of new home construction “adds to an already large pipeline of homes under construction,” said the BCREA.
It noted that the “overwhelming majority” of those units are apartments, which have “long and variable” completion times.
However, “as this supply is added to the market, future price growth will likely be constrained,” the association said.