Real estate prices in Chilliwack are hitting all-time highs as residential listings are at an all-time low. (Greg Laychak/Black Press file)

High Chilliwack home prices, sales forecast to moderate

2018 sales should be lower than 2017 and 2016, which was the hottest year on record

As house prices rise and supply dwindles, a cooling may be on the horizon thanks to mortgage changes in the new year.

The B.C. Real Estate Association’s (BCREA) fourth quarter housing forecast calls for a drop in sales for 2018 in the Chilliwack and District Real Estate Board (CADREB) along with just a 4.3 per cent increase in price.

Provincewide, the BCREA forecast calls for an 8.8 per cent decrease in sales by the end of 2017 and a further 10.4 per cent drop in 2018.

• READ MORE: Chilliwack real estate sales and prices remain hot

For CADREB, the BCREA forecasts a 13.1 per cent drop in sales below the record 4,306 in 2016.

“Housing demand across the province will face increasing headwinds in 2018,” according to Cameron Muir, BCREA’s chief economist. “A rising interest rate environment combined with more stringent mortgage stress tests will reduce household purchasing power and erode housing affordability.”

Muir says the five-year qualifying rate is forecast to rise 20 basis points to 5.15 per cent by the end of 2018. Add that to an estimated 20 per cent decrease in purchasing power thanks to new qualification rules for conventional mortgages means the market should cool.

• RELATED: Chilliwack among top 10 B.C. cities to buy real estate

As for prices, the average price of a home in CADREB area — which includes Chilliwack, Agassiz, Harrison Hot Springs, Hope, Boston Bar and in between — was $397,911 in 2016.

The BCREA forecasts the average MLS price in CADREB to average $469,400 for the entire 2017 up 18 per cent, the highest increase of the 11 real estate boards in the province.

That compares to the average sale price last month locally of $484,753. With a BCREA forecast average sale price in 2018 of $489,900, that would require a stability in the local market unprecedented over the last decade.

Indeed, BCREA forecast just a 4.3 per cent price increase year-over-year, close to the B.C.-wide prediction of 4.6 per cent from $712,300 in 2017 to $745,300 for 2018.

And while the fewer sales for 2017 and 2018 are just that, fewer sales, these numbers will still be the second and third highest years on record.

What analysts will be paying particular attention to in 2018 is the much-needed increase in supply. Supply is at near decade lows, which, coupled with increasing demand has led to the rapid rise in home prices.

BCREA says the combination of new demand coming on line along with decreased consumer demand due to the new rules should make for a more balanced market in 2018.


@PeeJayAitch
paul.henderson@theprogress.com

Like us on Facebook and follow us on Twitter.

Just Posted

Chilliwack pauses to remember

Services held special significance, marking the 100th anniversary of the end of the First World War.

B.C. Legions in need of young members to continue aiding veterans into the future

Lest we forget what thousands of men and women did to fight for Canada’s freedoms – but without new membership, many Legion chapters face dwindling numbers

Early morning bagpipe playing at Chilliwack memorial on Nov. 11

Piper Greg McCormick taking part in international Battle’s Over tribute at Piper Richardson statue

Ask the Coach: Prepping BCHL players for the NCAA

Chilliwack Chiefs head coach Brian Maloney answers questions unfiltered in Ask the Coach.

Biggest blanket drive of the year starts Tuesday in Chilliwack

Realtors Care Blanket Drive keeping the most vulnerable warm in winter since 1995

VIDEO: Marvel Comics’ Stan Lee dies

Marvel co-creator was well-known for making cameo apperances in superhero movies

18-year-old to hospital after shots fired in White Rock

Police investigating early-morning incident

Shelter struggles: Landlord takes over rental unit whenever visiting B.C. town

Renter’s story highlights how hard it is to find accommodation in Revelstoke

‘Weird Al’ brings Strings Attached tour to Lower Mainland next summer

Legendary musical satirist performs with full symphony orchestra

Lack of public response threatens B.C. referendum credibility

Of the few who have voted, poll finds most rejected proportional representation

Tentative deal reached in NHL concussion lawsuit

More than 100 former players accused the league of failing to better prevent head trauma

Grim search for more fire victims; 31 dead across California

More than 8,000 firefighters battled wildfires that scorched at least 1,040 square kilometres

Politicians need to do better on social media, Trudeau says

Prime minister suggests at conference in Paris some are trying to use technology to polarize voters

Wally Buono exits CFL, stinging from painful playoff loss

B.C. Lions lost the Eastern semifinal to the Hamilton Tiger-Cats on Sunday, 48-8

Most Read