BC’s housing market to bounce back from Vancouver price correction by 2021
The forecast is starting to look brighter for BC’s housing market in the coming years.
Central 1 Credit Union anticipates BC home sales will pick up again in 2020, and the following year prices are expected to increase as well but for now they’re “marshmallow soft.”
“Home sale deterioration ends in the first half of 2019 with a mild pick up in the latter part of the year as firm economic conditions underpin a recovery, and initial impacts of policy measures fade,” writes Central 1 Deputy Chief Economist Bryan Yu in a Resale Market Housing Outlook 2019-2021.
While an annual sales decline three-peat appears to be on the horizon, 2019’s year-over-year decline will be far less pronounced than the 20.2-perent drop in activity last year, Yu projects.
He’s calling for sales to drop 10.7 percent this year, before bouncing back by 8.8 percent in 2020 and 5.2 percent in 2021.
Meantime, the median price of a BC home is set to sink 4.1 percent this year to $515,000. A further drop of 1 percent is penciled in for 2020 but that will be eclipsed by a 1.2 percent increase in 2021.
A lingering low interest rate environment and the federal government’s recently announced First-Time Home Buyers Incentive are also going to help prop up the market, Yu suggests.
The incentive will see the Canadian government give qualified homebuyers up to 10 percent of a downpayment in exchange for a corresponding equity stake in the property.
“Faltering housing market activity will curtail new home construction and related employment and spending going forward, but there is still a lot to like in the economy,” Yu explains.
Yu notes the tech sector, infrastructure spending in the Lower Mainland, demand for Canadian exports as a result of the low Loonie, and the $40-billion LNG Canada gas terminal as positively contributing to the province’s economic prospects.