The downward trajectory of Metro Vancouver’s housing prices will continue through 2019, before stabilizing in 2020 and seeing real growth in 2021.
These are the projections according to Reuters’ recent poll of 20 housing analysts across the country, with the chance of a national correction pegged at just 20%.
Housing prices in the Vancouver region’s market will fall 1% this year, and this will be followed by a small 0.2% increase in 2020 and an uptick of 3% in 2021.
Contrast this with the predictions for Toronto, where house prices are expected to see consecutive year-over-year gradual growth, with upticks of 1.3% in 2019, 2% in 2020, and 3.5% in 2021. This aligns with the national growth forecast of 1.1% in 2020, 1.9% in 2020, and 3% in 2021.
The Reuters report cited Sebastien Lavoie, chief economist at Laurentian Bank Securities, to explain the shift in housing trends as due to changes in demand for home types.
“The Canadian housing market’s major shift from homeownership to rental continues,” said Lavoie.
“The stars are aligned for further strengthening in activity in the rental market: demand coming from atypical jobs and immigration, higher rates restraining some households to buy a home, the preference of millennials to delay the purchase of a home later in their life cycle.”
Home prices and volumes in home sales in Vancouver have been falling since last year, and a growing number of analysts in recent months have stated this will continue for the foreseeable future. Several reports have also noted that the BC NDP provincial government’s new regulations and tax measures on housing are having a real downward effect.
According to the Real Estate Board of Greater Vancouver, in 2018, home sale volumes reached an 18-year low and the benchmark price for all home types in the region was $1.032 million, which is 2.7% lower compared to the previous year.
Benchmark prices fell significantly by 7.8% for single-family detached homes throughout 2018, but condominiums saw an uptick of 0.6% during the same period, with most of the gains neutralized by a decline of 6.4% since June 2018.
Townhouse benchmark prices increased by 1.3%, with annual gains also hurt by a 5.3% decrease over the last six months.