Home sales set to slow, prices rise in latest B.C. real estate forecast
The B.C. Real Estate Association is predicting that some of the province's hottest housing markets will drop from a boil to a simmer this year after last year's record highs, while new hot spots will flare up further inland.
In its forecast released Thursday, the BCREA says residential sales in the province will slide 10 per cent, to 100,900 homes sold, after hitting a record high of 112,209 sales in 2016.
B.C.’s strong economy will keep sales brisk through 2018, the BCREA forecast notes, while average prices are expected to rise 3.5 per cent this year, to $715,000, and another 4.1 per cent in 2018, to $745,000.
"Strong employment growth, a marked increase in migrants from other provinces, and the aging of the millennial generation is supporting a heightened level of housing transactions,” said BCREA chief economist Cameron Muir. “However, a limited supply of homes for sale is causing home prices to rise significantly in many regions, particularly in the Lower Mainland condominium market."
Is Kootenay the next housing hot spot?
The Kootenay region may be the hottest market in B.C., with sales expected to surge 13.4 per cent to 3,350 units and prices tipped to rise 10.9 per cent, to an average of $310,000. No other region in the province is expected to see double-digit growth in both sales and prices this year, according to the BCREA.
Chilliwack should retain its title as the area with the fastest-growing home prices in B.C. The forecast calls for a price increase of 15.1 per cent to $458,000 this year, although that's down from the 18 per cent price surge seen in 2016. At the same time, home sales are expected to plunge 14.5 per cent, more than for any other region of the province.
The B.C. Northern region is seeing a turnaround after a 2016 in which it was the only area of the province to see prices fall. This year prices are expected to rise 6.9 per cent. Along with Kamloops and Kootenay, it's also one of the rare regions that will see rising sales in 2017.
Meanwhile, hot markets should show signs of cooling off, particularly in the Fraser Valley. The region that stretches from North Delta to Abbotsford saw price gains of 17.2 per cent last year, for an average price of $676,946. The pace will slow to just 4.1 per cent, for an average of $701,000.
So, where will prices grow the slowest? That title belongs to Greater Vancouver, with a gain of just 2.2 per cent expected, for an average price of $1,040,000. This is well off last year's pace of 12.7 per cent.