Price and sales volume decline in Metro Vancouver and the Fraser Valley have ripple effects on the rest of the province. (Central 1 Credit Union)

B.C. housing sales predicted to slow, prices to fall in 2019

Government policies expected to drive decline for third year

This year will be the third straight where home sales decline, and for the first time since 2012, so will B.C. average home prices, Central 1 Credit Union says in its latest forecast.

“Early 2019 home sales continue to deteriorate as federal and provincial policies continue to weigh on demand and lead to price declines among some of the larger urban markets,” says the organization representing credit unions in B.C. and Ontario.

The report, Resale Housing Outlook 2019-2021, says new home starts have held steady early this year, “but a sharp pullback is expected in the second half of 2019 as weakening resale market and pre-sale conditions cool construction.”

Central 1 forecasts that housing starts will decline 14 per cent this year to 35,000 units and slip further to around 33,000 units in 2020 and 2021. The report notes that this is still above 2016 levels, and the declines are confined to larger urban markets.

The report says smaller real estate markets have generally held steady, and northern B.C. housing demand is being supported by work beginning on liquefied natural gas facilities and pipelines. Alberta’s slow economy is identified as slowing sales of recreational properties in the B.C. Interior.

RELATED: Victoria housing starts mostly rentals, CMHC says

RELATED: Canada-wide housing starts picked up in March

The federal government’s addition of a “stress test” for bank mortgages in 2018 has required borrowers to qualify their ability to pay if interest rates increase, after a long period of low rates led to personal debt rates rising. B.C. has focused on increased taxes for foreign buyers and second homes in urban areas that have low rental vacancy rates and high purchase prices.

B.C.’s foreign buyer tax and speculation tax were extended to urban areas outside Metro Vancouver, where 20 per cent declines have been seen in high-end properties and high-priced locations such as Vancouver and West Vancouver.

“Similarly, sales in Kelowna, Abbotsford-Mission and Victoria have seen their sales slumps extend into 2019,” the report says. “While not of the same magnitude, sales are lower by more than 20 per cent, year over year.

“Weak activity in Metro Vancouver is contributing to fewer recreational and retirement home purchases in other markets, as homeowners face lower price/equity and difficulty selling their properties.”


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

Just Posted

Bella Coola grateful for help from Canadian Animal Assistance Team

Over two hundred animals received assistance from the team

B.C. oil tanker ban squeaks through final vote in Senate

Bill C-48 bars oil tankers from loading at ports on B.C’s north coast

Carey Price brings young fan to tears after surprising him at NHL Awards banquet

Anderson Whitehead first met his hockey idol after his mother died of cancer

Video shows fireworks shot at swan in Alberta

Alberta Fish and Wildlife is investigating the incident in Grande Prairie

‘Text neck’ causing bone spurs to grow from millennials’ skulls, researchers say

Technology use from early childhood causing abnormal bone growths in 41 per cent of young adults

B.C. teen killed by fallen tree on field trip remembered as hero

13-year-old Tai Caverhill was the first to spot the tree falling and warned his friends

Surrey RCMP raises Pride flag amid din of protesters

There were about 30 protesters on either side, and 20 Mounties doing crowd control

Should B.C. get rid of Daylight Saving Time?

The province wants to know, as state governments down south make the move

Air Canada reviewing how crew left sleeping passenger on parked plane

In a Facebook post, the woman said she woke up ‘all alone’ on a ‘cold dark’ aircraft

Canadians crash out of Women’s World Cup in 0-1 loss to Sweden

Canada missed a chance to tie the game on a penalty shot

Four-year-old boy assaulted at B.C. soccer game

It happened at a weekend tournament in Ashcroft

Most Read