Although home sales on the MLS across B.C. are expected to be 23 per cent lower in 2018 than last year, they will bounce back by around half that in 2019, according to a November 8 forecast by the B.C. Real Estate Association.
Having topped 103,000 sales in 2017, this year’s transactions are predicted to total around 80,000 by the end of December, said the BCREA. Next year, however, the association expects a rise of around 12 per cent to total 89,500 home sales across the province.
That figure would be a healthy annual sales total, with the 10-year average of provincial home sales standing at 84,800 units.
The graph above shows that the bulk of the sales recovery is expected to be seen in the Lower Mainland/Southwest region, with more incremental increases across the province.
The association also said it expects the growth of the average home sale price to steepen again, after a relatively modest 1.3 per cent annual increase in 2018 to $718,600. It is forecasting a record $760,000 average sale price next year, which would be a 5.8 per cent year-over-year rise.
The BCREA said that its bullish forecast was based on a strengthening economy and a surge of demand from the two largest buying groups – Millennials entering the market, and downsizing Baby Boomers.
Cameron Muir, BCREA’s chief economist, said, “The marked erosion of affordability and purchasing power caused by the mortgage stress test and rising interest rates continue to be a drag on the housing demand. However, continuing strong performance in the economy combined with favourable demographics is expected to push home sales above their 10-year average in 2019.”