In the release of its 2017 Fourth Quarter Housing Forecast, the British Columbia Real Estate Association (BCREA) is showing an expected 8.8% decrease in residential prices across the Province this year, and a further 10.4% decline next year.
The average MLS residential price in BC is forecast to increase 3.1% to $712,300 this year, and a further 4.6% to $745,300 in 2018.
Data released by the BCREA shows that homes sales in 2018 are estimated to dip to 91,700 units, down more than 10,000 from the record set in 2016, but still well ahead of BC’s 10-year sales average.
According to the BCREA chief economist Cameron Muir, the supply of homes is at or near its lowest point in decades, and that the imbalance between supply and demand is what has been largely responsible for the rapidly rising house prices in the past.
The Association says that interest rates are expected to rise next year, and the new mortgage stress tests will reduce household purchasing power and erode housing affordability.
The 5-year qualifying rate is forecast to rise 20 basis points to 5.15% by the 4th quarter of 2018, and the new qualification rules for conventional mortgages will erode purchasing power by up to 20%.
“Given the rapid rise in home prices over the past few years, the effects of these factors will likely be magnified”, Muir says.
To view the full BCREA Housing Forecast, click here.
Buying a home is one of the largest financial transactions you will ever make in your life. So why wouldn’t you trust a professional to do it for you? When you decide to do so, contact us and one of our experienced real estate professionals will help you find your dream home.