Sales to Decline, Home Prices to Keep Rising

Sales to Decline, Home Prices to Keep Rising

BCREA releases inaugural Housing Forecast

Vancouver, BC – April 26, 2007. The British Columbia Real Estate Association (BCREA) released its first semi-annual Housing Forecast report today. The report contains forecasts and analysis of the British Columbia economy and housing markets, including detailed forecasts by home type of the province’s twelve real estate board areas.

“Market forces have realigned,” said Cameron Muir , BCREA Chief Economist. “Some potential home buyers are now finding themselves at the wrong end of a price-led affordability squeeze, and home sales are forecast to edge down as a result.” MLS® residential sales are forecasted to dip 3 per cent to 93,600 units in the province in 2007, and a further 4 per cent to 89,500 units in 2008. The ten-year average is 77,811 units.

“A more balanced market is emerging in the aftermath of less frenetic buying activity and an increase in residential listings,” added Muir. The supply of active listings in the province increased 27 per cent to 32,879 units in March compared to the same month last year. “More balance between supply and demand will mean less upward pressure on home prices,” said Muir. The average MLS® residential price in the province climbed 18 per cent to 0,963 in 2006. This year, the average MLS® residential price is forecast increase a more modest 8 per cent to 2,000, and a further 7 per cent to 0,000 in 2008.

“Strong economic fundamentals will underpin housing demand through 2008,” noted Muir. “Robust labour demand is forecasted to keep job growth high and unemployment low. In addition, wages and salaries, and personal disposable income are forecast to rise well above the inflation rate.”

BC housing starts are forecasted to decline 7 per cent to 33,900 units in this year and a further 6 per cent to 32,000 units in 2008. While new home inventories remain at low levels, capacity constraints are inhibiting the ability of many BC home builders to increase production.


A complete copy of BCREA’s Housing Forecast is available here:

http://www.bcrea.bc.ca/economics/forecasts/2007-04 Housing Forecast.pdf

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