B.C. real estate experts are predicting vulnerable tides in the year ahead as rising interest rates are set to impact homeowners across the province.
In the BC Real Estate Association’s first-quarter housing forecast for 2018, released Friday, experts predict that residential sales will dip by 8.6 per cent – or 94,855 units per year.
Still, that leaves B.C.’s housing sales well above the province’s 10-year average of about 84,000 units annually.
Unsurprisingly, analysts are pointing to slower economic growth, tougher mortgage qualification rules in addition to increasing interest rates as some of the main factors in the slowing stats.
Association chief economist Cameron Muir said this means housing demand will moderate this year, with no sign of bouncing back into 2019.
By the numbers, about 60,000 homes are under construction across the province, well above the previous peak of 45,000 units for the same time period recorded in 2008, as builders continue to react to the lack of supply.
In Metro Vancouver alone, 2,000 units are in the pipeline, 56 per cent more than recorded in 2008, the association said.
But despite that – and the five-year-qualifying rate forecast to rise 35 basis points by the end of 2018, and another 21 basis points by the end of 2019 – prices are still set to continue increasing.
The association estimates that the average price of a home is to increase six per cent to $752,000 this year, and a further four per cent to $781,800 in 2019.