File photo.
Rising interest rates and the cost to buy a home are among the reasons realty experts are forecasting a drop in residential home sales on Vancouver Island and across the province.
The B.C. Real Estate Association (BCREA) released its first-quarter housing forecast and residential sales in Victoria are anticipated to fall 9.6 per cent in 2018 and another 2.3 per cent next year.
For Vancouver Island, sales are expected to drop 10.8 per cent this year and another 1.7 per cent in 2019.
The BCREA says hikes in interest rates and prices, along with “B.C. government policy efforts to tamp down demand” will lead to slower consumer demand through 2019.
However, the estimated average price of sales is still expected to go up 4.9 per cent in Victoria this year to $685,000, after an 11.5 per cent average price jump in 2017.
For Vancouver Island, the BCREA sees a hike of 7.6 per cent in 2018 to $464,000 for the average price to buy a home.
The average sale increased by 12.5 per cent in 2017 to $431,255 for the Island.
Provincially, an anticipated 94,855 homes are forecast to be sold in 2018, which would be a drop of 7.5 per cent from 103,763 sales in 2017.
If projections hold true, it would be the first time since 2014 that home sales in B.C. do not reach 100,000.
Although another small dip is anticipated in 2019, the numbers will still be higher than the 10-year average of 84,800 units sold.
Economic expansion over the next two years is expected to slow down with low unemployment and lukewarm growth in the labour force.
The organization says the supply of homes up for sale remains near decade lows but adds construction activity is at a record level.
Andy Neal
