B.C home sales are forecast the plummet 23% by the end of 2018 compared with the previous year, according to a new report from the B.C. Real Estate Association (BCREA).
The BCREA’s fourth-quarter outlook pegs Multiple Listing Service (MLS) sales at 80,000 units for the year, down from 103,768 units in 2017.
The BCREA pointed to the new mortgage stress test introduced by Ottawa in January as the main culprit behind the decline.
“Its 200 basis point increase in the qualifying rate was a shock to housing markets and its impact was especially pronounced in affordability-strapped Metro Vancouver,” the report stated.
“While the downturn appears largely over, housing demand may trend near its current level for several quarters before exhibiting a noticeable recovery.”
The BCREA forecasts that the province will see sales grow 12% to 89,500 units by the end of 2019.
Meanwhile, it estimates 24,000 housing starts in Metro Vancouver in 2018-19, boosting housing stock and lessening upward pressure on house prices.
The MLS average price is expected to grow 2.9% next year in Metro Vancouver to $1,080,000.
The Canada Mortgage and Housing Corporation (CMHC) released its own forecast for 2019 and 2020 on November 6, telling British Columbians they should expect housing starts and MLS sales to moderate.
“Over the next two years, Metro Vancouver's resale market will see lower sales, higher inventories of homes for sale and lower home prices compared with recent market highs,” the CMHC stated.