BC home prices to increase by 7.7% by end of 2020 amidst strong recovery
Home sales and prices in British Columbia are expected to increase by the end of 2020, partially due to pent-up demand from earlier in the year due to COVID-19 and the low mortgage rate.
According to BC Real Estate Association’s (BCREA) newly released third quarter housing forecast update, home sales in the province are expected to see an uptick of 6.5% to 82,380 units in 2020.
The province will see this trend continue through 2021, when there will be a 17.6% increase to 96,860 units.
The average home price will also increase by 7.7% to $754,000 in 2020, and 3.7% to $781,000 in 2021.
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When it comes to regional markets, Metro Vancouver is forecast to see residential sales increase by 11% to 28,500 units in 2020, and 21.1% to 34,500 units in 2021. Home price increases of 5.9% to $1.045 million in 2020 and 2.4% to $1.07 million in 2021 can also be expected.
Similar rates of increases in home sales and prices are also forecast for the Fraser Valley market.
“The outlook for the BC housing market is much brighter following a surprisingly strong recovery,” said Brendon Ogmundson, chief economist of the BCREA, in a statement.
“We expect home sales will sustain this momentum into 2021, aided by record-low mortgage rate.”
BCREA’s forecast strongly contrasts with Canada Mortgage and Housing Corporation’s (CMHC) June 2020 update, when the federal crown corporation stated the housing market in Metro Vancouver will “contract significantly in the immediate future.”
CMHC took into account falling demand from reduced immigration and domestic migration, the loss of household income due to mass unemployment, and the increased economic uncertainty affecting consumer confidence. It anticipated a drop in home sales and prices and a recovery beginning later in 2021.
But based on monthly market updates by regional real estate boards, the housing markets in BC are generally performing better than anticipated.
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