Vancouver, BC – November 28, 2017. The British Columbia Real Estate Association (BCREA) released its 2017 Fourth Quarter Housing Forecast today.
Multiple Listing Service® (MLS®) residential sales in the
province are forecast to decline 10.4 per cent to 91,700 units in 2018,
after an expected 8.8 per cent decrease this year. A record 112,209 unit
sales were recorded in 2016. The ten-year average for MLS® residential
sales in BC is 84,700 units. Strong economic and demographic
fundamentals are supporting elevated housing demand. However, a number
of factors are expected to temper home sales in the province next year.
“Housing demand across the province will face increasing
headwinds in 2018," said Cameron Muir, BCREA Chief Economist."A rising
interest rate environment combined with more stringent mortgage stress
tests will reduce household purchasing power and erode housing
affordability." The 5-year qualifying rate is forecast to rise 20 basis
points to 5.15 per cent by Q4 2018, and the new qualification rules for
conventional mortgages will erode purchasing power by up to 20 per cent.
"Given the rapid rise in home prices over the past few years, the
effect of these factors will likely be magnified."
The supply of homes for sale is now trending at or near decade
lows in most BC regions. The imbalance between supply and demand has
been largely responsible for rapidly rising home prices. The combination
of weakening consumer demand and a surge in new home completions next
year is expected to induce more balanced market conditions, producing
less upward pressure on home prices. The average MLS® residential price
in the province is forecast to increase 3.1 per cent to $712,300 this
year, and a further 4.6 per cent to $745,300 in 2018.
If you are a Seller, we can chat about the property valuation and how to leverage yourself, let me know and we can sort.
If you are a Purchaser, touch base and we can chat about the implications of the qualifying stress tests. 250-884-3980
My Best, Arran McLellan
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