The British Columbia Real Estate Association (BCREA) has now released its 2018 Third Quarter Housing Forecast Update.
Multiple Listing Service® (MLS®) residential sales in the province are forecast to decline 21 per cent to 82,000 units this year, after recording 103,768 residential sales in 2017. MLS® residential sales are forecast to increase by 8 per cent to 88,700 units in 2019. The 10-year average for MLS® residential sales in the province is 84,800 units.
The BC housing market is grappling with a sharp decline in affordability caused by tough B20 stress test rules for conventional mortgages, said Cameron Muir, BCREA Chief Economist. While these rules have had a negative effect on housing demand across the country, the impact has been especially severe in BCs large urban centres because of already strained housing affordability.
In spite of the policy-driven downturn in housing demand, strong fundamentals continue to underpin the market. Demographics are highly favourable, especially the millennial generation who are now entering their household-forming years. In addition, low unemployment is leading to significant upward pressure on wages and, by extension, household wealth and confidence.
The pullback in BC home sales is helping alleviate a chronic shortage of supply. After trending at decade lows, active listings in the province were up nearly 20 per cent in July. The combination of slower housing demand and an increase in the inventory of homes for sale has trended most markets toward balanced conditions. This means more selection for home buyers, fewer multiple offer situations and less upward pressure on home prices.
Spotlight on Kelowna Real Estate and the Central Okanagan
According to the report, the total number of Real Estate sales for the Central Okanagan for 2018 are forecast to be 7,500, this is a fall of 17.2% compared to last year.
In 2019 sales numbers are set to rise slightly to 7,800 which represents an increase of 4%.
Average MLS® prices are forecast to be $539,000 for 2018, an increase of 8.3% and $575,000 in 2019, an increase of 6.7%.
In looking at these figures, we need to bear in mind that these numbers cover the Central Okanagan as a whole and not just the Kelowna area.
BCREA continue to forecast rising prices in the Central Okanagan area.
Click the link here to read the full report http://www.bcrea.bc.ca/docs/economics-forecasts-and-presentations/housingforecast_.pdf