Photo: David J Laporte/Flickr
For a third consecutive year, BC home sales exceeded 100,000 units in 2017 — the longest series of annual sales totals of that magnitude on record, says the British Columbia Real Estate Association (BCREA).
But the organization says that this trend won’t hold up in 2018.
According to BCREA Chief Economist Cameron Muir, home sales are expected to drop this year thanks to a variety of headwinds.
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“Tighter mortgage regulations for conventional mortgage borrowers now is going to impact their purchasing power,” Muir tells BuzzBuzzNews.
“Some additional increases in interest rates in 2018 will impact affordability. And also in many markets the price level has risen quite significantly over the past couple of years,” he adds.
According to the BCREA’s latest data, published today, a total of 103,763 homes sold across the province in 2017, down 7.5 per cent from 2016.
Muir anticipates that roughly 95,000 units will change hands this year, representing a seven to eight per cent drop compared to 2017.
Although transactions are predicted to fall in 2018, Muir adds that sales are expected to be well above the 10-year average of 85,000 units.
To meet demand in 2018, Muir anticipates that more inventory will enter the market.
“We’ll likely see some additional supply particularly on the new home side, which will help at least trend markets towards a little bit more balance. Thereby, leading to a little less upward pressure on home prices,” says Muir.
In 2017, Muir says housing demand was underpinned by a strong economy, employment growth and rising wages — all of which are expected to continue supporting the market in 2018.
The economist adds that demand was also supported by relatively low interest rates in 2017.
Last year, the average price of a home in BC was $709,579, up 2.7 per cent compared to 2016.