Home prices in BC are expected to drop in 2017, according to the latest report by the BC Real Estate Association.
The report predicts the average MLS residential price in BC will fall by 1.1% to $683,500 this year and increase 5.2% to $719,100 in 2018.
As well, residential sales in the province are forecast to decline by 10% to 101,000 units expected to sell this year, after a record 112,209 units were sold in 2016.
That was the most number of units sold in a year in the province since at least 2005.
MLS notes the decline in the provincial average price is “largely due to the rising demand for more affordable condominiums and a larger proportion of home sales occurring outside the Metro Vancouver region.”
This demand is due to strong employment growth, consumer confidence, and an influx of inter-provincial migrants, said the report.
The millennial generation entering the household-forming years is also placing major pressure on supply in urban centres, it said.
“The supply of homes for sale is at a 20-year low in the province, with sellers’ market conditions prevalent across most BC regions and home types,” the report states.
In May of this year, total active listings in the province were down 11.1% compared to May 2016.
The ratio of home sales to active listings was well over 20% in nine of the province’s 11 real estate boards, and over 50% in Vancouver, the Fraser Valley, Chilliwack and Victoria.