Expect home prices to climb in Metro Vancouver and BC
Typical B.C. home price will top $937,000 in 2022 – and $1.2 million in Metro – as housing starts plunge 12.8 per cent.
Article Courtesy: Western Investor
Article By: Frank O'Brien
Despite election pledges from every major political party to boost new home construction, B.C. housing starts will plunge 12.8 per cent next year, helping to drive average home prices to record highs across the province, according to a recent forecast from the B.C. Real Estate Association (BCREA.)
“With strong demand being supported by low mortgage rates and a rapidly rebounding post-COVID economy, the more significant concern is whether there will be an adequate supply of listings in the market,” said BCREA chief economist Brendon Ogmundson in a third quarter Housing Forecast Update released August 19.
BCREA is forecasting that the lack of supply coupled with high demand will see the average B.C. composite home price increase 16.6 per cent this year to $911,300 and a further 2.9 per cent in 2022 to $937,300.
In Greater Vancouver, the average home price will hit $1.2 million next year, up 2.1 per cent from 2021 and nearly $200,000 higher than two years earlier, the forecast said.
Using Canada Mortgage and Housing Corp. forecast data, the BCREA said B.C. housing starts will plunge 12.8 per cent next year, compared to 2021, to 39,000 units. The drop will be led by the multi-family sector, where starts are forecast to fall 16.8 per cent to 28,300 homes.
Many of the multi-family starts, however, will be rental housing or subsidized social housing, not market condominiums or townhomes.
Housing supply has become a key election plank for Canada’s three major political parties as they campaign for the September 20 federal election, but the emphasis is not on encouraging private-sector housing.
Here is how the election housing supply promises stack up among the federal parties.