Price and sales volume decline in Metro Vancouver and the Fraser Valley have ripple effects on the rest of the province. (Central 1 Credit Union)

B.C. housing sales predicted to slow, prices to fall in 2019

Government policies expected to drive decline for third year

This year will be the third straight where home sales decline, and for the first time since 2012, so will B.C. average home prices, Central 1 Credit Union says in its latest forecast.

“Early 2019 home sales continue to deteriorate as federal and provincial policies continue to weigh on demand and lead to price declines among some of the larger urban markets,” says the organization representing credit unions in B.C. and Ontario.

The report, Resale Housing Outlook 2019-2021, says new home starts have held steady early this year, “but a sharp pullback is expected in the second half of 2019 as weakening resale market and pre-sale conditions cool construction.”

Central 1 forecasts that housing starts will decline 14 per cent this year to 35,000 units and slip further to around 33,000 units in 2020 and 2021. The report notes that this is still above 2016 levels, and the declines are confined to larger urban markets.

The report says smaller real estate markets have generally held steady, and northern B.C. housing demand is being supported by work beginning on liquefied natural gas facilities and pipelines. Alberta’s slow economy is identified as slowing sales of recreational properties in the B.C. Interior.

RELATED: Victoria housing starts mostly rentals, CMHC says

RELATED: Canada-wide housing starts picked up in March

The federal government’s addition of a “stress test” for bank mortgages in 2018 has required borrowers to qualify their ability to pay if interest rates increase, after a long period of low rates led to personal debt rates rising. B.C. has focused on increased taxes for foreign buyers and second homes in urban areas that have low rental vacancy rates and high purchase prices.

B.C.’s foreign buyer tax and speculation tax were extended to urban areas outside Metro Vancouver, where 20 per cent declines have been seen in high-end properties and high-priced locations such as Vancouver and West Vancouver.

“Similarly, sales in Kelowna, Abbotsford-Mission and Victoria have seen their sales slumps extend into 2019,” the report says. “While not of the same magnitude, sales are lower by more than 20 per cent, year over year.

“Weak activity in Metro Vancouver is contributing to fewer recreational and retirement home purchases in other markets, as homeowners face lower price/equity and difficulty selling their properties.”


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

Just Posted

Garbage overflowing around bins in popular Vancouver Island park

Resident blames the design of the garbage bins as garbage piles up at Mount Doug Park

Science expedition to Canada’s largest underwater volcano departs Vancouver Island

Crews prepared for a two-week research mission to the Explorer Seamount

More than 200 lives saved in first year at Victoria’s supervised consumption site

Vancouver Island’s largest site celebrates first anniversary with a report of zero deaths

Editorial: Illegal dumping is the hobby of cowards and fools

It probably costs you less time and money to take it to the dump

Taekwondo instructor, 21, identified as bat rabies victim

Nick Major, 21, an instructor at Cascadia Martial Arts in Parksville

WATCH: Parksville Qualicum MLA Michelle Stilwell takes first extended steps in nearly three decades

‘It actually felt like walking. It’s been 27 years… but it felt realistic to me’

Report of dead body in B.C. park actually headless sex doll

This discovery, made at Manning Park on July 10, led police to uncovering two other sex mannequins

Dog recovering after being drenched in hot coffee, B.C. man charged

Man was taken into custody, charged, and released pending a court date

Undercover operation stings four at Island pawn shops and second hand stores

Accused face charges of attempt to possess stolen property after Campbell River arrests

Hawaiians protest massive telescope on sacred mountain

Officials close road as opponents pursue legal halt

Grand Forks fire chief found to have bullied, harassed volunteer firefighter: report

WorkSafeBC, third-party human resources investigation looking into allegations complete

Mountie says his good-byes to North Island Indigenous communities

Paul Starr saluted after years of fostering reconciliation between RCMP and First Nations

Push on to establish Vancouver Island as an arts powerhouse

Island-wide conversation underway on how the arts and culture can amplify economic development

Most Read