VANCOUVER, BC - Soaring prices seen in B.C.'s housing market through 2017 will moderate, but further appreciation lies ahead, according to an updated Central 1 Credit Union (Central 1) forecast.
While more restrictive mortgage regulations, rising interest rates and high prices will temper some demand-side pressure over the next two years, Central 1 expects the provincial median home value to climb another five per cent in 2018 (to $525,000) and three per cent in 2019 as inventory constraints in B.C. urban areas persist.
After a bounce-back in activity, fears the Metro Vancouver market would face a year of reckoning following more restrictive housing policy in 2016 appear to be largely unfounded, though buyers are adjusting their behaviour in response.
"This is a testament to the desirability of homeownership and strength in the economy. With detached homes moving further out of reach, buyers are shifting their purchases out to the suburbs and into higher density housing, sending multi-family prices higher," said Deputy Chief Economist Bryan Yu.
Similarly, housing markets on Vancouver Island and the Southern Interior of B.C. have experienced strong price growth and high sales, bolstered by economic growth, population growth and demographic factors.
"The demand for multi-family housing is near record-high levels, which speaks to a demand for affordable housing, particularly in large urban areas," explained Yu.
The series of federal measures to tighten credit availability, coupled with provincial measures, has led to the most stringent housing policy environment in decades - low interest rates will no longer provide an offset. As prices surge in the entry-level apartment and townhome markets, many would-be buyers will be sidelined, fueling further demand for already scarce rental housing and driving rents higher.
Although stricter regulatory conditions and deteriorating affordability will dampen sales, Central 1 expects sellers' market conditions to continue in 2018-19.
Highlights from the report:
Read the full report: B.C. Housing Outlook 2017-2019.
With offices in Vancouver, Mississauga and Toronto, Central 1 holds on balance sheet approximately $17.7 billion in assets. We provide wholesale financial products, trust services, payment processing solutions and direct banking services to about 300 credit unions and institutional clients from coast to coast.
In addition, Central 1 is the primary liquidity manager, payments provider and trade association for our 42 member credit unions in B.C. and 70 Ontario member credit unions. Our members represent a consumer-oriented, full-service retail financial system that collectively serves 3.3 million members and holds more than $124.5 billion in assets. For more information, visit www.central1.com.
Member & External Communications Manager
Central 1 Credit Union
T 604.737.5397 or 1.800.661.6813 ext. 5907
Deputy Chief Economist
Central 1 Credit Union
T 604.742.5346 or 1.800.661.6813 ext. 5346