The British Columbia Real Estate Association (BCREA) released its 2015 Fourth Quarter Housing Forecast Update today.
Multiple Listing Service® (MLS®) residential sales in the province are projected to surpass 100,000 units this year. This level of home sales will be the third strongest on record and mark the first year since 2007 that BC home sales exceed the ten year average.
After climbing 15 per cent in 2014 and nearly 20 per cent this year, BC MLS® residential sales are forecast to decline 7 per cent to 93,700 units in 2016. “Less latent pent-up demand and gradual upward momentum of mortgage interest rates is expected to ease housing demand next year,” said Cameron Muir, BCREA Chief Economist.
“The inventory of homes for sale is now at its lowest level in nearly eight years,” added Muir. “Sellers’ market conditions are prevailing in many communities and causing home prices to be pushed higher.” The average MLS® residential price in the province is projected to increase 10.2 per cent to $626,000 this year and forecast to slow to a 2.2 per cent increase at $639,700.
Total housing starts in the province are projected to reach over 30,000 units this year, the highest level of production since 2008. Capacity constraints and an edging back of consumer demand is largely behind a forecast decline of BC housing starts, albeit just to 28,800 units in 2016.