Home Sales To Climb Eight Per Cent This Year

British Columbia housing markets are returning to normalcy after two years of volatility. Employment and population growth is expected to fuel consumer demand over the next two years.
 
However, higher mortgage interest rates and tighter credit conditions for low equity home buyers will limit home sales to below the ten-year average of 87,600 units. Residential unit sales through the Multiple Listing Service® (MLS®) in BC are forecast to increase 8 per cent to 80,900 units in 2011, and climb an additional 4 per cent to 83,950 units in 2012. A record 106,000 transactions were recorded in 2005.
 
Total active residential listings in the province declined 14 per cent since last spring. However, the inventory of homes for sale is expected to grow as the number of new listings to the market advances during the first two quarters of 2011.

Regional market differences continue in the province, with Vancouver trending into a seller’s market, while the Okanagan, Kootenay and Kamloops markets trend from a buyer’s market toward balanced conditions.
 
The average MLS® residential price is forecast to increase 2.3 per cent to $517,000 this year and edge down 0.4 per cent to $515,500 in 2012.

Last year’s strong growth in average prices was largely the result of a sizable shift in demand toward high-end housing in Vancouver which skewed average home price data for BC higher than market conditions suggest.

A return to a more normal price distribution of home sales in Vancouver this year will temper average home price appreciation in the province.

Housing starts in BC are forecast to remain at last year’s pace, albeit up by 0.5 per cent to 26,600 units. While the undersupply emerging in some communities will stimulate construction activity, there remains a sizable amount of vacant inventory in the province. A significant increase in production is unlikely until 2012 when vacant inventories are drawn down to normal levels.

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