BC Home Sales To Rise In 2019
The British Columbia Real Estate Association (BCREA) recently released its 2018 Fourth Quarter Housing Forecast.
Multiple Listing Services (MLS) residential sales in the province are expected to decline 23% to 80,000 units by the end of the year, after recording 103,768 residential sales in 2017. Although those numbers are not ideal for home sellers, don't let it discourage you. MLS residential sales are forecast to increase 12% to 89,500 units in 2019. The 10-year average for MLS residential sales in the province is 84,800 units.
“The marked erosion of affordability and purchasing power caused by the mortgage stress test and rising interest rates continue to be a drag on the housing demand,” said Cameron Muir, BCREA Chief Economist. “However, continuing strong performance in the economy combined with favourable demographics is expected to push home sales above their 10-year average in 2019.”
Strong performance of the BC economy continues to be highly supportive of housing demand, despite the drag from mortgage policy on the sector. Five consecutive years of above trend growth in the province has led to a high level of employment and an unemployment rate that appears to be at a cyclical low.
After several years of chronic supply shortages, total active residential listings across the province are up 30% year-over-year. The combination of few home sales and a larger inventory of homes for sale has helped trend most markets in BC to balanced conditions, meaning no advantages for either buyers or sellers. As a result, home price growth has slowed a considerable amount, and is expected to more closely reflect overall consumer price inflation. In addition to this, a record number of homes are under construction throughout the province, which will provide for much needed expansion of the housing stock and greater price stability.
Below is the Housing Forecast Summary for the Fourth Quarter.