Photo: Paul Joseph/Flickr
Brighter days are ahead for BC’s housing market.
At least that’s what the British Columbia Real Estate Association (BCREA) is saying in a new forecast.
The association predicts that resale activity will rebound in 2019 after finishing up this year with activity down 23 percent annually for a total of 80,000 transactions.
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BCREA anticipates next year 89,500 homes will change hands, representing a year-over-year increase of 12 percent.
That is above BC’s 10-year average of 84,800 sales per year.
“Despite the drag from mortgage policy, strong performance of the BC economy continues to be highly supportive of housing demand,” reads the BCREA 2018 Fourth Quarter Housing Forecast.
Expanded stress testing, which the federal government introduced in January, has been a drag on the market as it has made it more difficult for some mortgage applicants to qualify.
“The erosion of affordability and loss of purchasing power induced by the stress test, as well as by moderately rising interest rates, are expected to temper housing demand through 2019,” BCREA notes in the report.
Pricewise, BCREA generally expects home values to increase in tandem with inflation. In Greater Vancouver and Fraser Valley, the association forecasts growth of between 3 to 5 percent next year. Although BCREA considers the Vancouver market balanced, supply levels are still low enough to insulate it somewhat from the fallout of stricter mortgage rules.
There were 12,984 active listings in Greater Vancouver in October, according to the Real Estate Board of Greater Vancouver. It has been four years since there were as many listings on the market. “While slower housing demand is reminiscent of 2012 when maximum amortizations were reduced to 25 years, active listings are still a fraction of their level at the time,” says BCREA.