A housing headwind that will lead to more balanced market conditions is on tap for the next two years.
That’s according to the British Columbia Real Estate Association’s (BCREA) first quarter housing forecast.
But while the BCREA predicts unit sales provincewide to drop 8.6 per cent for 2018 and the average price to rise by six per cent, for the Chilliwack and District Real Estate Board (CADREB) area, the sales drop forecast is much lower and the price increase higher.
The BCREA predicts the 3,983 units sales in CADREB in 2017 will drop 3.3 per cent to 3,850 in 2018 and a further 2.6 per cent to 3,750 in 2019.
As for average prices, the 2017 average of $464,897, which was up 16.8 per cent over 2016 (highest of all boards in the province) is forecast to leap 7.1 per cent to $498,000 in 2018 and a further 4.4 per cent to $520,000 in 2019.
That forecast, however, would mean a virtual levelling off of home prices for the remaining 10 months of this year as the average price of the 444 homes sold in CADREB in the first two months of 2018 was $495,549. For February that average sale price was $508,261 up 56 per cent from the average of $325,606 just two years ago.
And if last year’s BCREA forecast for Chilliwack is any measure, not too much stock should be put into this year’s prediction.
A year ago, the BCREA predicted Chilliwack’s 4,306 sales in 2016 would drop 21 per cent to 3,400 for 2017 and 3,100 in 2018. What actually happened? Instead of 21 per cent, sales dropped just 7.4 per cent to 3,983 in 2017.
As for price, a year ago the BCREA predicted a 4.5 increase in average sale prices to $416,000 for 2017 and 2.9 per cent more to $428,000 for 2018. Instead, in 2017 prices jumped 16.8 per cent to $464,897 for 2017.
As part of its analysis, the BCREA says the four consecutive years of three per cent or more real GDP growth, rising employment, and increased retail sales in B.C. led to the boom we are in. But for 2018 and 2019, low unemployment coupled with tepid labour force growth, along with tighter mortgage rules, rising interest rates and elevated prices, mean the housing market should cool.
Provincewide it predicts a drop from 103,763 sales in 2017 to 94,855 in 2018 and 94,025 in 2019.
But with an average sale price in B.C. last year of $709,579, and much of that high-priced market to the west of Chilliwack, the local average sale price of $464,897 is a relative bargain, and will continue to be so even above the half-million-dollar mark hit in February.