B.C. home sales to fall as interest rates rise, but prices stay strong: BCREA - InfoNews

Current Conditions

-0.9°C

B.C. home sales to fall as interest rates rise, but prices stay strong: BCREA

A sold sign is pictured outside a home in Vancouver, B.C., Tuesday, June 28, 2016. Real estate experts in British Columbia predict residential home sales will dip this year but remain well above the province's 10-year average, although they warn rising interest rates could leave some B.C. households "vulnerable." THE CANADIAN PRESS/Jonathan Hayward
March 09, 2018 - 8:02 AM

VANCOUVER - Real estate experts in British Columbia predict residential home sales will dip this year but remain well above the province's 10-year average, although they warn rising interest rates could leave some B.C. households "vulnerable."

The British Columbia Real Estate Association has released its 2018 first quarter housing forecast, showing residential sales are expected to fall 8.6 per cent to 94,855 units this year, with the decline continuing into 2019.

The projected skid follows the 7.5 per cent decrease recorded last year but the association says residential sales in B.C. are still well above the 10-year average of 84,800 units.

Strong employment growth, consumer confidence and more workers moving to B.C. are credited for the booming housing market over the last four years, including 2016, when a record 112,209 homes changed hands.

But the association predicts the pace of sales will cool due to several factors, including a five-year qualifying rate for a mortgage that is forecast to reach 5.70 per cent by the fourth quarter of 2019.

Chief economist Cameron Muir predicts higher interest rates, coupled with slower economic growth, will carry the moderating trend in home sales right through next year.

"More stringent mortgage qualifications and rising interest rates will further erode affordability and household purchasing power," Muir says in a news release.

The association also notes the supply of homes for sale continues at, or near, decade lows in most B.C. regions but it says 60,000 new homes are now under construction, well above the 2008 high of 45,000 units.

"Slowing consumer demand combined with a surge in new home completions over the next several quarters will create more balance in the housing market and produce less upward pressure on home prices," the association says in its release.

It estimates the average price for a home in B.C. is forecast to increase 6.0 per cent to $752,000 this year, and a further 4.0 per cent to $781,800 in 2019.

News from © The Canadian Press, 2018
The Canadian Press

  • Popular vernon News
  • Comments
  • Police search for missing Kelowna woman
    KELOWNA - Kelowna RCMP are asking for the public's help in finding a missing 27-year-old woman. RCMP say Joenna Saunders was last heard from on Nov. 27. She was reported missing on Dec.
  • Girl opens Christmas present she gave to boy when she dumped him in 1971
    ST. ALBERT, Alta. - A man in Edmonton who made international headlines for holding onto a wrapped Christmas gift from a high-school girlfriend who dumped him nearly 50 years ago finally learned wh
  • Water quality advisory in effect in North Okanagan
    NORTH OKANAGAN - The district has issued a water quality advisory for the North Okanagan. The Regional District of North Okanagan Silver Star Water Utility in conjunction with Interior Healt
  • Kamloops Fire Rescue respond to McDonalds deep fryer fire
    KAMLOOPS - A Kamloops McDonalds was temporarily closed last night due to a small deep fryer fire. Kamloops Fire Rescue arrived at the McDonalds location in Sahali at about 11:30 p.m. last ni
  • Vernon fast food restaurant held up by man with syringe
    VERNON - RCMP are on the hunt for a suspect after a robbery at a Vernon restaurant earlier this week. A man threatened staff with an allegedly contaminated needle on Wednesday, Dec. 5, at Wr
View Site in: Desktop | Mobile