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.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Four activists face charges linked to 2019 Abbotsford hog-farm protest

Mischief and break-and-enter charges laid for incidents on four separate days prior to the protest

Three men face attempted murder charges after Harrison Hot Springs stabbing

Man, 24, sent to hospital with life-threatening injuries following attack Wednesday

‘Tiny home’ being built for Abbotsford woman with severe allergies

Online campaign raises $59,000 for custom cargo trailer for Katie Hobson

Chilliwack children can get tested locally, Fraser Health confirms

Erroneous information online and via 811 has many families driving to Abbotsford for testing

Face masks will be mandatory for customers at all Walmart locations

Requirement goes into effect on Wednesday, Aug. 12 across Canada

371 British Columbians battling COVID-19, health officials confirm

Thursday (Aug. 6) saw a second straight day of nearly 50 new confirmed cases

‘We don’t make the rules’: Okanagan pub owner says staff harassed over pandemic precautions

‘If you have six people plus a baby, guess what? That’s seven’ - West Kelowna Kelly O’Bryan’s owner

Remembering Brent Carver: A legend of Broadway who kept his B.C. roots strong

Over the years, the Cranbrook thespian earned his place as one of Canada’s greatest actors

Wrong-way driver triggers multi-vehicle collision on Highway 99 in South Surrey

Police received multiple reports of vehicle heading north in southbound lanes

Statistics Canada says country gained 419,000 jobs in July

National unemployment rate was 10.9 per cent in July, down from the 12.3 per cent recorded in June

Canada plans $3.6 billion in retaliatory tariffs on U.S. in aluminium dispute

The new Canada-United States-Mexico Agreement that replaced NAFTA went into force on July 1

Canada ‘profoundly concerned’ over China death sentence for citizen in drug case

Police later confiscated more than 120 kilograms of the drug from Xu Weihong’s home

Answers to 5 common questions facing families for the COVID-19 school year

COVID-19 protocols are likely to vary even more at the school board level, and even and school-to-school.

Visitors and non-residents entering closed remote B.C. First Nation’s territories

With limited resources, they say they don’t have any authority or power to enforce the closures

Most Read