Home sales in British Columbia have been subdued during 2018 and are expected to end the year 23% lower than 2017 with 80,000.
The figures from the British Columbia Real Estate Board (BCREA) reflect the tough year the province’s housing markets – especially Vancouver – following policy changes including the mortgage stress test and interest rate hikes. It could have been worse though had the economy not remained supportive.
But there is better news ahead with sales forecast to rise 12% in 2019 to 84,000 units, just above the 10-year average of 80,000.
“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.”
Most markets in BC have moved to balanced conditions with fewer sales and rising inventory. That has meant an easing of price appreciation which is expected to more closely track consumer price inflation in 2019.
Record construction in BC is also bringing new supply to the market which BCREA believes should further support price stability.