WATCH: A new report from Central 1 Credit Union indicates that housing sales and home prices in B.C. are forecast to dip this year, but a rebound is not far in the future.
A new report from Central 1 Credit Union indicates that housing sales and home prices in B.C. are forecast to dip this year, but a rebound is not far in the future.
According to the report, the provincial median housing price is predicted to fall by 4.1 per cent this year to $515,000.
It’s the first drop since 2012.
Overall, sales in B.C. are slated to decrease by 11 per cent.
Resales, in particular, will be down for the third straight year.
“Normally when we see a housing down-cycle it’s associated with an external effect, whether it’s going to be an economic recession or economic downturn or slowdown,” said Central 1’s deputy chief economist Bryan Yu. “What we’re looking at currently is largely policy-driven event.”
Yu says policies like the federal mortgage stress test, the B.C. speculation tax and the expanded foreign buyers’ tax have all led to declining sales.
“We’re starting to see less speculation in the market,” said B.C. finance minister Carole James. “An increase in vacancy rates is another piece we’re going to be looking for to make sure that we start to see more affordable opportunities come in that area as well.”
Experts say the lower mainland will be most affected, while the Victoria market is still supported by strong demand.
“The reality is, there’s still more people who are looking to buy here and there’s not enough properties to sell. So we still have a supply problem,” said The Condo Group’s Tony Zarsadias.
Prices are expected to increase again by 2021 and sales are expected to be on the rise by next year.