BCREA has published their housing forecast for 2019. Although 2018 has been a very tough year with a decline of 23% in residential sales compared to 2017, BCREA predicts that there will be a 12% increase in 2019 to 89,500 units, just above the 10 year average of 84,000.
The slower housing market this year is largely due to the mortgage stress test coupled with the increasing interest rates which reduced the purchasing power of mortgage borrowers. Despite these setbacks, the strong performance of the BC economy has fuelled housing demand. The strong economy has seen higher rates of employment and a greater labour force which should see more growth as large investments such as by LNG Canada fuel economic growth.
Demographics and housing demand
With a robust population growth all across Canada, BC’s millennials will keep a strong demand on urban rental and condominiums over the next few years. Moreover, retirement-friendly areas will see a strong demand as baby boomers decide to move in and still live close to family and friends.
Supply is up in 2018 by 30% year-on-year, this places the market in a balanced condition where there is no advantage to buyers or sellers. With high levels of construction in BC, we will see greater price stability and an increase in housing stock.
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