Housing sales will slide over the next couple of years, according to the Canada Mortgage and Housing Corporation’s (CMHC) fall market outlook.
While 2014 sales are expected to reach 32,800 units, this will slip to 32,250 and 31,600 units in 2015 and 2016, respectively.
This drop will be due to higher mortgage interest rates, said the national housing agency, which are expected in the last half of 2015.
Price growth is expected to be 1.2% and 1.7% over the next two years, which will result from a shift to lower-cost housing.
Housing starts will continue at a “steady pace” over the next two years,
The total units projected for 2014 are 18,900. Expect 18,700 and 19,250 unit starts in 2015 and 2016, respectively, said the CMHC.
“Housing starts are expected to dip slightly in 2015 but overall, the trend is stable,” CMHC senior market analyst for Vancouver Robyn Adamache.
“Condominium apartments and rental housing, both purpose-built rental as well as mortgage helpers, will drive multiple-family housing starts over the next two years.”
Across the province, home sales are projected to reach 79,200 in 2015 and 79,300 in 2016. The average home price will be $566,300 and $573,000 over those two years, forecasts the CMHC.
Housing starts will total 28,300 and 29,000 homes in 2015 and 2016, respectively.
“Total housing starts will edge higher as resale market conditions remain balanced and the supply of completed and unabsorbed (unsold) new homes trends lower,” said CMHC B.C. regional economist Carol Frketich.
“Housing demand will be supported by employment and population growth, but tempered by gradually rising mortgage interest rates.”