Higher income levels, migration from other provinces and stable employment growth should continue to fuel demand for housing in Abbotsford and Mission over the next year, the Canadian Mortgage and Housing Corporation (CMHC) predicted in a new report issued Wednesday.
The CMHC predicted single-family housing starts in the Abbotsford-Mission Census Metropolitan Area (CMA) will continue to increase and resales will rise to record levels this year spurred,in part by lower prices compared to neighbouring Vancouver.
“Lower prices in the CMA are attractive to buyers in neighbouring centres in the Fraser Valley as well as to people relocating to the region for other personal and financial reasons,” the CMHC says in its Spring 2016 Housing Market Outlook report.
The report also notes that there is a smaller gap between the cost of multi-family homes and single-family houses in Abbotsford and Mission as compared to the rest of the Lower Mainland. That, the CMHC, says will allow more homebuyers to make the jump to owning their own house than elsewhere.
Similarly, construction of new apartment and townhouse units is forecast to rise as young families and recent retirees priced out of the single-family home market seek affordable housing options.
House prices, which have already risen by more than 20 per cent over just the last year, will continue to increase in the Fraser Valley, the CMHC predicts, thanks to “strong sellers’ conditions.”
The CMHC suggests home prices could increase by between 11 and 22 per cent this year.
That record demand for housing “will continue to be supported by population growth” in the Abbotsford-Mission CMA, the report forecasts, with migration coming both from other provinces by both young workers and would-be retirees.
All those predictions come with some qualifiers, however.
The CMHC’s forecast for the region last spring was unable to predict the past year’s record-breaking real estate market. That 2015 report predicted housing prices to increase by just 3.8 per cent and the vacancy rate – which would drop to a record low by the end of the year – to remain relatively unchanged.
This year, the CMHC notes that an increase in mortgage rates could slow the real estate market. It also notes that Abbotsford’s new Official Community Plan may push housing starts towards the upper range of its forecast. And the forecast suggests that if single-family home prices finally start to price out large numbers of would-be home buyers, sales may shift to cheaper attached units.
In its Vancouver forecasts, the CMHC notes that “there is evidence that overvaluation is detected in the Vancouver housing market,” but it did not make a similar statement about the Abbotsford-Mission market.