New B.C. Housing Outlook Report 2018 – 2020
VANCOUVER – B.C. can expect slower housing market sales volume and price growth through 2020 due to policy constraints, higher mortgage rates and deceleration in economic growth, according to the latest Central 1 Credit Union (Central 1) forecast.
“As expected, the housing market has seen a pronounced shift in 2018 with introduction of tighter lending requirements and uncertainty related to provincial housing policy,” said Deputy Chief Economist Bryan Yu.
According to Central 1’s BC Housing Outlook Report 2018 – 2020, the median provincial resale price is forecast to rise 6.4 per cent to $532,000 this year, before slowing to a near 2.5% growth rate in 2019 and 2020, aligning with more balanced market conditions. Price growth continues to be led by larger urban markets, despite slowing significantly from prior year rates.
“The housing cycle has peaked and the lower sales environment is expected to persist through the forecast period as credit-squeezed buyers are either priced out of market, delay purchases or lower their housing expectations – shifting from single-family to multi-family options,” says Yu.
New home construction is forecast to hold steady at a near 40,000 unit pace, driven by demand for multi-family units. While condo sales are likely to decelerate with slower market conditions, demand will still remain firm due to population growth, demographic shifts, and firm rental market and investor demand. This dip in private homeowner demand will partly be offset by investment by governments in affordable rental projects.
The report also includes a section reviewing median prices for census metropolitan areas and census agglomerations across B.C., which align with standard geographic areas defined by Statistics Canada. This differs from real estate board areas, which typically do not align with standard geographies.
Highlights from the report:
- Tighter credit restrictions and provincial policy measures trigger 11 per cent decline in home sales in 2018, and tempers sales activity through 2020 despite healthy economy
- Large urban markets experience brunt of sales curtailment
- Red hot market conditions reverting towards balance throughout B.C., moderating price growth to about 2.5 per cent per year in 2019 and 2020
- Low resale inventory continues to support price levels
- Metro Vancouver detached home prices to ease over next two years
- Housing starts to hold steady to a near 40,000 unit pace with government investment offsetting easing in private demand
Read the full report: B.C. Housing Outlook 2018-2020
About Central 1
Central 1 is a preferred partner for financial, digital banking and payment products and services – fuelling the success of businesses across Canada. With $19.5 billion in assets, we leverage our scale, strength and expertise to power progress for more than 300 credit unions and other financial institutions, enhancing the financial well-being of more than 3.4 million. For more information, visit www.central1.com.
Member & External Communications Manager
Central 1 Credit Union
T 604.737.6814 or 1.800.661.6813 ext. 6814
Deputy Chief Economist
Central 1 Credit Union
T 604.742.5346 or 1.800.661.6813 ext. 5346