File photo. (Ragnar Haagen/News staff)

‘Subdued’ housing market predicted in B.C. through 2021: report

The Central 1 Credit Union report predicts “rising but subdued sales” over the next three years, with little movement in median home prices.

Another dismal forecast for British Columbia’s housing market, one day after the Canadian Real Estate Associate predicted home sales will continue to dip in the province next year.

Central One Credit Union, which provides services to more than 300 credit unions across Canada, says in its housing forecast for 2018 to 2021 that B.C. experienced a “mild provincial housing recession” this year.

The report points to the federal government’s mortgage stress test, higher interest rates and various provincial policy measures for the downturn and predicts “rising but subdued sales” over the next three years, with little movement in median home prices.

Bryan Yu, Central 1’s deputy chief economist, says builders have noted the shift and the result is a sharp drop in housing starts since September, especially in urban areas.

He says starts in B.C. are predicted to fall to about 32,000 units in each of the next two years after nearly 40,000 units were under construction this year and 43,500 in 2017.

But the update also predicts positive housing market outlooks in some areas, including Vancouver Island, where retirees fuel the market, and in Northern B.C., where demand is boosted by a liquefied natural gas project and associated pipelines.

Read more: B.C.’s skyrocketing real estate market will ‘correct’ in 2019: analyst

Read more: Vacancies remain low as rents rise in B.C.

As work ramps up on the $40-billion LNG Canada project in and around Kitimat, Central 1 says housing markets in the north are forecast to outperform those in southern B.C., which were hit the hardest this year.

“Sales in B.C.’s combined metro markets of Vancouver, Abbotsford-Mission, Kelowna and Victoria are down 40 per cent compared with the end of 2017, led by the Lower Mainland markets,” Yu says in a news release.

The report shows annual resale home transactions plunged 17 per cent in 2018 and median resale prices slipped two per cent to $520,000.

“Gone are the days of rapid price escalation,” says Yu.

Negative growth in residential investment will drag on the broader B.C. economy, but the Central 1 update says the effect should be blunted by ongoing consumer demand linked to the lowest unemployment rate in Canada, high job vacancy rates, wage gains and population growth.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

Foundry Kelowna to take its services on the road this fall

Foundry Mobile will break down barriers for Kelowna youth thanks to a generous donation

Suspect drops white powder running from police near Kelowna playground

Kelowna RCMP responded to reports of two individuals swinging a chain in a park

Public upset over man allegedly exposing himself at Kelowna’s Rotary Beach

No arrests made, charges not considered at this time, RCMP say

Warmer fall weather could extend wildfire season: AccuWeather

Above seasonal temperatures are expected throughout September, October and November

Who let the dogs out: Only 17 days until Kelowna’s 2nd annual mud race for pups

This year will be bigger and better than last year, organizers say

Paws! Join the cause and raise money for the BC SPCA

Sign up to walk in the annual BC SPCA Paws for a Cause walk

RCMP catch ‘erratic’ driving thieves; upon release steal mountain bike

The incident involved a police chase, taser, and a destroyed vehicle

New study suggests autism overdiagnosed: Canadian expert

Laurent Mottron: ‘Autistic people we test now are less and less different than typical people’

B.C. father tells judge he did not kill his young daughters

Andrew Berry pleaded not guilty to the December 2017 deaths

Trans Mountain gives contractors 30 days to get workers, supplies ready for pipeline

Crown corporation believes the expansion project could be in service by mid-2022

Heavy police responses in Kamloops connected to unfounded weapons calls

Mounties were seen in Westsyde and in North Kamloops on Tuesday night and Wednesday morning

Rosemount cooked diced chicken linked to listeria case in B.C.

The symptoms of listeria include vomiting, nausea, fever, muscle aches

B.C. seniors allowed more choice to stay in assisted living

Province doesn’t need to wait for a complaint to investigate care, Adrian Dix says

Retired B.C. fisherman wins record $60M Lotto Max jackpot

Joseph Katalinic won the biggest Lotto Max prize ever awarded

Most Read