Photo: Guilhem Vellut/Flickr
The British Columbia Real Estate Association (BCREA) expects Metro Vancouver’s new foreign buyers tax to help moderate housing market activity in the region, but still sees BC home sales totalling 113,000 units this year. That would be a new record, and an increase of over 10 per cent from 2015.
In an August 25th report, the organization explains that while the tax, which was introduced on August 2nd, “is expected to accelerate a moderating trend in the market that began earlier in the year,” other BC housing markets are “performing above expectations” and offsetting a province-wide deceleration.
BC’s high home sales are largely being driven by strong economic growth, particularly in Vancouver, whose unemployment rate was the lowest in the country in July. According to the BCREA, that strength has led to an uptick in employment, as well as higher consumer confidence; as a result, BC residents are snapping up homes, apparel and other goods “at above average levels.” Increased migration from other provinces is also helping the BC economy — in particular, workers are coming from Alberta due to fewer job opportunities there.
That said, home sales aren’t universally high across BC, and the BCREA sees changes in the landscape coming in 2017. It notes that while the northern half of the province should remain a buyer’s or balanced market next year, the southern half, currently a strong seller’s market, will likely become more hospitable to buyers. It’s basing that outlook on the fact a record number of homes are now under construction in Metro Vancouver, and on its prediction that the foreign buyers tax will reduce demand in the area.
The BCREA believes BC’s economic fundamentals continue to support above-average housing demand, but anticipates home sales easing off in 2017, recording a total of 104,400 units for the year.