Strong Housing Demand Forecast Through 2017: BCREA 2016 First Quarter Housing Forecast Update

Vancouver, BC – January 28, 2016. The British Columbia Real Estate Association (BCREA) released 2016 First Quarter Housing Forecast Update today.

MLS Residential Unit Sales by Region BC 2005-2017Multiple Listing Service® (MLS®) residential sales in the province are forecast to edge back 6.2 per cent to 96,100 units this year, after reaching 102,517 units in 2015. Strong consumer demand is expected to push MLS® residential sales up by 2 per cent to 98,000 units in 2017.

Housing demand in the province is being supported by a relatively robust economy, leading to strong employment growth and rising wages. In addition, net interprovincial migration is on an upswing as many Albertans look to BC for job opportunities. BC home sales are forecast to remain well above the ten-year average of 83,200 units over the next two years.

“The inventory of homes for sale is now at its lowest level in almost a decade,” said Cameron Muir, BCREA Chief Economist. “Fewer homes for sale and strong consumer demand are expected to push home prices higher in most BC regions this year and in 2017.” The average MLS® residential price in the province is projected to increase 6.4 per cent to $677,200 this year and a further 4.1 per cent to $705,300 in 2017.

New home construction activity is expected to remain at elevated levels corresponding to strong consumer demand and relatively thin inventories, particularly on the South Coast. Total housing starts in the province are forecast to remain close to an annual pace of 30,000 units through 2017, which will be the strongest two year performance since the 2007-2008 period.

B.C. Could Lead Canadian Economic Growth in Low-loonie Era, Economists Say: CBC News

This article appeared on CBC.ca on January 15th, 2016.

Service industry and resource exporters stand to gain from low Canadian dollar

Beautiful British Columbia Logo Real Estate EconomyMany of B.C.’s industries will benefit from the low Canadian dollar, making it likely the province will lead the country in economic growth this year, say economists.

The Canadian dollar dropped again Friday to 68 cents US, fuelling concern that the growing downward momentum means tough times ahead for the country.

But some experts say B.C.’s diverse economy means enough sectors will benefit from the low loonie to boost the province’s outlook overall.

“One thing that really is emerging from the current environment is the fact that B.C. is doing relatively well precisely because we are more diversified,” said Ken Peacock, vice-president and chief economist at the Business Council of British Columbia.

“B.C. is doing very, very well, probably will lead the country this year in terms of economic growth.”

Here is a rundown of how economists think some of B.C.’s industries will fare in a low-loonie environment.
Service: tourism and film

Service industries like tourism and film are already feeling the benefits of a low Canadian dollar.

“Certainly in the services exports such as tourism, TV [and] film, the reaction is much more immediate,” said Helmut Pastrick, chief economist for Central 1 Credit Union.

Ski resorts like Whistler Blackcomb recorded 90,000 more visits for the fiscal year ending Jan. 3, 2016 than for the same time period the year before according to the company.

Those numbers are just the beginning of good times for B.C.’s $4 billion tourism industry says Tourism Vancouver.

“Now that [B.C.] is even greater value for those spending US dollars, we’re certainly expecting those numbers to go up in 2016,” said president and CEO, Ty Speer.
Real estate

Those hoping the low dollar will mean relief for B.C.’s high housing prices are in for disappointment, according to Peacock.

“The Americans will be looking to British Columbia, property prices, and say you know what, there’s a 30 per cent discount for us.”

Pastrick agrees, but adds that the impact of additional foreign interest may not make much of an impact.

“Most of the demand, the housing sales that we see are from local residents. So in that sense the market will not be impacted too much.”
Resources

Pastrick says the forestry industry in B.C. faces a mixed future. Demand for lumber will continue to climb, partially due to housing construction.

“U.S. housing starts will be higher this year and again in 2017,” he said adding that the outlook for softwood lumber exporters depends on agreement re-negotiations with the United States.

People in resources industries that rely on global demand may need to wait to see benefits, according to Pastrick.

But while coal and metal industries wait for big buyers like China to bounce back, Canada is still doing well.

“Canada is running a trade surplus for the last six to seven months,” said Pastrick “That too means the Canadian economy is somewhat stronger than is generally assumed.”

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December Smashes Home Sales Record and 2015 Enters Record Book, BCREA

Vancouver, BC – January 15, 2016. The British Columbia Real Estate Association (BCREA) reports that a record number of home sales were recorded in the province for the month of December. A total of 6,590 residential unit sales were recorded by the Multiple Listing Service® (MLS®) last month, up 29.8 per cent from the same month the previous year. Total sales dollar volume hit a record $4.62 billion for the month of December, up 55.4 per cent compared to the previous year.

MLS Residential Sales December 2015The average MLS® residential price in the province climbed above the $700,000 threshold for the first time in BC last month, rising 19.7 from December 2014 to $700,943.

“The 2015 housing market finished in dramatic fashion, with record demand for month of December,” said Cameron Muir, BCREA Chief Economist. “BC home sales breached the 100,000 unit threshold in 2015, and it was only the third time on record that this high watermark was achieved.”

The combination of record home average home prices and near record annual unit sales prices propelled the dollar volume of MLS® residential to a record $65.3 billion in 2015, up nearly 37 per cent from the previous year. The average annual residential price reached a record $636,627 last year, up 12 per cent from 2014. A total of 102,517 residential unit sales were recorded, an increase of 22 per cent compared to 2014. A record 106,310 residential unit sales were recorded in 2005, while the only other year eclipsing 2015 were 2007 when 102,805 unit sales were recorded.

November Home Sales Second Strongest on Record, BCREA

Vancouver, BC – December 14, 2015. The British Columbia Real Estate Association (BCREA) reports that a total of 8,032 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in November, up 34.5 per cent from the same month last year. Total sales dollar volume was $5.38 billion, up 56.4 per cent compared to the previous year. The average MLS® residential price in the province rose to $668,317, up 16.3 per cent from November 2014.

MLS Residential Sales November 2015“Housing demand last month was the second strongest ever recorded for the month of November,” said Cameron Muir, BCREA Chief Economist. “You’d need to look all the way back to the frenetic market of 1989 to find more homes trading hands in November.“

The largest increase in consumer demand occurred in the Fraser Valley, where home sales climbed over 60 per cent from November 2014. Vancouver and Chilliwack experienced an increase of over 40 per cent, while Kamloops home sales were up 30 per cent.

The year-to-date, BC residential sales dollar volume increased 35.4 per cent to $60.7 billion, when compared with the same period in 2014. Residential unit sales climbed by 21.5 per cent to 95,927 units, while the average MLS® residential price was up 11.4 per cent to $632,209.

Robust Housing Demand Continues in October, BCREA

Vancouver, BC – November 12, 2015. The British Columbia Real Estate Association (BCREA) reports that a total of 8,725 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in October, up 14.1 per cent from the same month last year. Total sales dollar volume was $5.8 billion, up 32.3 per cent compared to the previous year. The average MLS® residential price in the province rose to $667,480, up 16 per cent from October 2014.

BC Market Conditions Sales to Listings Ratio Oct 2015“Consumer demand continued at a heightened pace in October,” said Brendon Ogmundson, BCREA Economist. “Market conditions have diverged significantly in the province as very low supply and a near record pace of home sales in the metro-Vancouver area is offsetting resource sector driven weakness in northern markets.“

“There was a four month supply of residential inventory province wide in October, with markets in the Lower Mainland and Victoria closer to three months of supply. A balanced market typically exhibits a five to eight month supply of homes for sale.

The year-to-date, BC residential sales dollar volume increased 33.6 per cent to $55.3 billion, when compared with the same period in 2014. Residential unit sales climbed by 20.4 per cent to 87,895 units, while the average MLS® residential price was up 11 per cent to $628,909.

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