B.C. Home Sales to Increase 7% in 2011, Median Price to Rise to $402,000
Central 1 Credit Union released their latest market report on March 2nd, 2011. Click on the charts to enlarge
VANCOUVER — Home sales in British Columbia will rise about 7 per cent in 2011 and the median price will set a new record of $402,000, according to the latest B.C. Housing Forecast 2011-2013, released today by Central 1 Credit Union.
Total home sales will rise to 95,500 units, rebounding from a 10.5 per cent drop in 2010 as both resale and new home sales will increase. Sales will increase another 2 per cent in 2012 and a healthy 15 per cent in 2013. “Even after those gains, sales will be below the levels we saw from 2002 to 2007,” said Central 1 economist Bryan Yu. “Low, but rising, interest rates and tighter mortgage insurance rules will restrict sales for the next few years.”
This year, sales will be stronger in the first few months as buyers move to beat the tougher mortgage insurance rules that take effect on March 18. “Metro Vancouver will observe the strongest uptick in early-year activity, given the higher proportion of local buyers and higher prices in those areas,” added Yu. During the three-year forecast period, home sales are expected to be strongest in the Metro Vancouver area and in Northern B.C.
Despite tightened mortgage insurance rules and modest increases in mortgage rates, stable levels of net in-migration and improved economic conditions will bolster sales in Metro Vancouver. The economy in the north will continue to benefit from strong commodity markets and trade-related activity, which will keep housing activity on an upward trend through the forecast horizon.
The weak links in B.C.’s housing market will remain areas with a high exposure to external recreational and retiree buyer demand. Housing markets in the Okanagan, the Kootenays and parts of Vancouver Island will continue to see weaker demand conditions in 2011 as mortgage rates rise and buyers remain hesitant to make discretionary and luxury purchases. These markets will observe significant rebounds in 2012 and 2013 as buyers take advantage of lower prices and retiree and recreational demand strengthens on improved economic conditions.
Following flat activity in 2011, housing sales in the Thompson-Okanagan region are forecast to rise 8 per cent in 2012 while the Kootenays will see 10 per cent growth. Both markets are forecast to record more than 20 per cent gains in sales in 2013.
This year, posted five-year fixed-term mortgage rates will range from an average of 5.4 per cent in the first quarter to 5.9 per cent in the fourth quarter. The average rate is projected to rise to 6.65 per cent in the fourth quarter of 2012.
For full report click here