The BC Real Estate Association has published its forecast for the BC Real Estate Market for 2018 through to 2019 today.
Snapshot of their Kelowna Real Estate Market Forecast
- Fall in unit sales for the Kelowna Real Estate Market and Central Okanagan of 2.8% & 0.6% in 2019.
- Average MLS® prices will rise 6.7% in 2018 and 2.6% in 2019.
Read the full summary below-:
BC Housing Forecast Update March 2018
Multiple Listing Service® (MLS®) residential sales in the province are forecast to decline 8.6 percent to 94,855 units this year, after recording 103,763 residential sales in 2017. MLS® residential sales are forecast to edge back a further 1 percent to 94,025 units in 2019. Housing demand is expected to remain above the 10-year average of 84,800 units in 2020. Strong economic performance and favourable demographics in BC are underpinning housing demand. However, more stringent mortgage qualification rules, rising interest rates and already elevated home prices are expected to provide headwinds to consumer demand.
The BC economy has experienced four consecutive years of 3 percent or more real GDP growth, with 2017 growth estimated at 3.8 percent. The dollar volume of BC exports increased 13 percent to $43.8 billion last year, despite a tariff-induced pull-back in softwood lumber exports. Employment climbed 3.7 percent, nearly twice the national average of 1.9 percent. More than 87,000 jobs were added to the economy last year, while the unemployment rate fell to its lowest level since 2008. Retail sales climbed nearly 10 percent over the same period.
Strong economic performance has coincided with favourable demographics, especially the millennial generation entering their household forming life-stage. This has contributed to BC home sales cresting 100,000 units in each of the last three years and low vacancy rates in the province’s major urban centres. However, low unemployment and tepid labour force growth is expected to slow economic expansion over the next two years. Housing headwinds from tighter mortgage qualification rules, a rising interest rate environment, an already elevated price level, and BC government policy efforts to tamp down demand will also contribute to slower consumer demand through 2019.
The supply of homes for sale continues to trend near decade lows, which has contributed to escalating home prices in most BC regions. However, residential construction activity is at a record level. Over 60,000 units are under construction in the province compared to less than 45,000 during the previous peak in 2008. In Metro Vancouver, over 42,000 units are in the pipeline, 56 percent above 2008 levels. As a result, new home completions are expected to rise significantly over the next several quarters, adding much-needed supply to the market. The net effect of slower housing demand and a marked expansion of the housing stock will be more balanced market conditions and less upward pressure on home prices.
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