have recently emerged<\/a>, but a new forecast from Central 1 Credit Union maintains that the \u201cred hot\u201d environment will remain for the rest of the year.<\/p>\n\nIn commentary published earlier this month, Deputy Chief Economist Bryan Yu wrote that sales and price gains are set to remain elevated with conditions continuing to favour home sellers.<\/p>\n
The economist forecasts that home sales will end the year up 37 percent compared to 2020. The province\u2019s housing market, following years of sluggish activity, had already posted significantly higher sales last year compared to 2019 as mortgage rates hit record lows and the pandemic shifted buyer preferences to larger suburban homes.<\/p>\n
But Yu believes the market will reach a peak in 2021 and cool down over the next couple of years as the pandemic\u2019s impact runs its course.<\/p>\n
\u201c[C]urrent trends are unsustainable and a move towards a normal market environment is expected in the second half of the year as the pandemic wanes,\u201d Yu wrote.<\/p>\n
In 2022, the economist estimates that sales will fall by 21 percent, followed by another nearly four percent drop in 2022.<\/p>\n
\u201cThe primary drivers of the current boom are low borrowing costs and a shift in household pandemic preferences. Both are outside the control of policymakers and are expected to naturally wane as the pandemic eases,\u201d he wrote in the forecast.<\/p>\n
The declines in sales forecast for 2022 and 2023 would bring transaction volumes in line with historical averages for the province.<\/p>\n
Meantime, Yu expects the median BC home price to climb by 10 percent to $643,000 this year, with growth slowing to the three to four percent range in 2022 and 2023.<\/p>\n
While 2021 may be the peak when it comes to sales activity and price growth \u2014 at least, for the foreseeable future \u2014 the economist writes that a lack of housing supply and a growing population will support housing market strength for years to come.<\/p>\n
![\"bc-housing-market-cool-2022\"](\"https:\/\/www.livabl.com\/articles\/wp-content\/uploads\/2021\/05\/bc-housing-market-cool-2022.jpeg\")
<\/a>Photo:\u00a0Sigmund<\/a>\u00a0\/\u00a0Unsplash<\/a><\/em><\/p>\n