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

Osoyoos RCMP officer before Penticton courts for alleged indecent act

Const. Ryan Fulcher is currently suspended with pay

Former Summerland lifeguard to be sentenced in January

Edward Casavant has pleaded guilty to child assault and pornography charges

Officers’ use of force in Penticton arrest that injured a male driver deemed necessary: Watchdog

IIO reviewed the incident after the driver alleged he was “slammed” to the ground by an officer

Busy lineup of live performances this winter at Penticton’s Cannery Brewing

Musicians like Ari Neufeld will be perfoming at the brewery throughout December and January

Prolific offender sentenced to over a year for police chase in South Okanagan

Tyler Newton was sentenced to 14 months and one week in prison… Continue reading

Video: Magicians and Bubble Wonders highlight Penticton Shriners Variety Show

The annual fundraiser filled the Cleland Community Theatre on Sunday.

Meng Wanzhou wins right to more documents involving arrest at Vancouver airport

Defence lawyers allege the Huawei executive was unlawfully detained, searched and interrogated

RCMP traffic services moves to Falkland to slow speeders

Falkland detachment to serve as new HQ for RCMP’s North Okanagan Traffic Services

Truck with body inside found at bottom of lake near Kootenay ferry

Investigators believe no foul play is expected but are unsure how the vehicle ended up in the Arrow Lakes

Mr. Mikes to donate $22K to local charities

Restaurant looking for Deeds Well Done in 7th annual holiday campaign

Truck fire spreads to property in gated Vernon community

A loud bang rang out as flames spread to the grass

Map points to mysterious ‘Waterdome’ in the middle of Salmon Arm Bay

City would like to have map marker removed, pilot recalls its significance

VIDEO: Calgary man narrowly escapes from avalanche while running at Lake Louise

Bryon Howard caught the entire wild experience on camera

Most Read