British Columbia's housing market will experience steady but moderate growth in prices and sales over the next three years, says a new forecast by Central 1 Credit Union (Central 1).
The median resale house price in B.C. is expected to end this year at $388,000.
“We expect prices to rise about 1.5 per cent in 2014, 2.5 per cent in 2015 and 3 per cent in 2016, taking the median price to $415,000,” said Central 1 economist Bryan Yu.
Total home sales will be under 70,000 for 2013, rising about 7 per cent to 72,500 in 2014, and hitting 84,000 in 2016.
“Although growth is significant, the sales level remains low when adjusted for the population base,” Yu said.
Home sales will depend on population and economic growth, which are forecast to expand at a subdued pace through most of 2014 before accelerating later in the forecast period. Low mortgage rates will continue to support housing demand.
Meanwhile, the tightening of mortgage insurance and other credit constraints over the past couple of years will continue to constrain activity. Low-equity buyers are most impacted by the affordability squeeze, Yu said.
New home sales are expected to rebound in 2014 by 30 per cent but remain at a low level of 15,500 units. Housing starts are expected to climb two per cent in 2014 to about 26,500 units.
New construction in the Lower Mainland Southwest will decline slightly as builders respond to elevated inventory. In contrast, starts are expected to trend higher in most other areas of the province. Province-wide starts will reach about 30,500 units by 2016, Central 1 predicts.
