HOUSING FORECAST SLOWER GROWTH EXPECTED FOR ECONOMY AND HOUSING MARKET INSIDE. Second Quarter May 2018

Transcription

1 Second Quarter May 2018 HOUSING FORECAST SLOWER GROWTH EXPECTED FOR ECONOMY AND HOUSING MARKET Multiple Listing Service (MLS ) residential sales in the province are forecast to decline 9 per cent to 94,200 units this year, after posting 103,700 unit sales in MLS residential sales are forecast to remain relatively unchanged in 2019, albeit down 0.2 per cent to 94,000 units. Housing demand is expected to remain above the 10-year average of 84,800 units into The BC economy has expanded at an above-trend rate of growth for four consecutive years. This enviable experience has contributed to elevated interprovincial migration, robust employment growth, and strong consumer confidence. However, the BC labour market is now showing signs of nearing full employment. Job growth has slowed considerably, apart from some part-time employment being rolled into full-time. A shortage of skilled labour is emerging and causing wages to be pushed higher. Now that the Alberta economy is on the mend, interprovincial migration is slowing and BC consumers are unlikely to push retail sales into the stratosphere again this year. As a result, the BC economy is expected to slip back to trend growth over the next 12 months. The housing market continues to be supported by a strong economy, albeit facing slower growth. However, demographics will be the key driver over the next few years as growth in the adult-aged population is bolstered by immigration and the massive millennial generation as they enter their household forming years. Still, there are significant headwinds in the housing market. Rising mortgage interest rates are expected to further erode affordability and purchasing power. This effect will likely be exacerbated by an already high price level. In addition, tougher mortgage qualifications for conventional mortgagors have already taken their toll on housing demand. While the effects are expected to diminish over the next several months, the legacy will be a reduction of purchasing power by up to 20 per cent. The provincial government has also introduced measures to sap housing demand. While a foreign buyer tax and several other policies aimed at taxing wealth will do little to generate housing affordability, the negative signal to the market will likely divert investment elsewhere. There are now over 60,000 residential units under construction in the province. With new home completions set to rise significantly this year, there will be some relief to the chronic shortage of homes for sale. The combination of slowing housing demand and a rising inventory of homes for sale is expected to trend most BC markets toward balanced conditions this year, and lead to less upward pressure on home prices. INSIDE Economic Outlook... 2 Vancouver Island-Coast...4 Lower Mainland-Southwest...6 Thompson-Okanagan...8 Northern BC Kootenay...12 Tables

2 ECONOMIC OUTLOOK After an almost unprecedented four-year run of robust economic growth, the BC economy appears to be returning to its long-run trend. That means it is unlikely, though not impossible, that the BC economy will continue to produce the remarkable economic and employment growth enjoyed since Indeed, early data for 2018 is consistent with that interpretation. Employment in the province appears to have plateaued in recent months while the provincial unemployment rate is testing decade lows. As a result, wages are rising as firms bid for increasingly scarce skilled labour. The wider Canadian economy is facing a similar situation to BC, as the national economy appears to be operating at full capacity. Economic growth in the country has exceeded its estimated long-run trend for several quarters and the Canadian unemployment rate has fallen to its lowest level since As a result, BC Economic Outlook F 2019F Real GDP Growth (%) Employment (millions) Employment Growth (%) Unemployment (000s) Unemployment Rate (%) Personal Disposable Income ($billions) Personal Disposable Income Growth (%) Average Weekly Wage Weekly Wage Growth (%) Retail Sales ($billions) Retails Sales Growth (%) Range of Posted 5-year Fixed Mortgage Rate Values have been estimated where data has not yet been released. Source: BCREA Economics, Statistics Canada inflation has accelerated, rising above the Bank of Canada s 2 per cent target. The combination of an economy operating at capacity with inflation at or above its medium-run target signals further monetary tightening to come from the Bank of Canada, and higher mortgage rates for homebuyers. Many lenders have already increased their 5-year qualifying mortgage rates to levels not seen since Higher interest rates, in combination with the B20 mortgage stress test, will act to slow the BC economy as home sales slow and highly indebted households pull back on spending. The impact of the stress test on home sales has been slightly more pronounced than past changes to mortgage qualification rules, which makes sense given that the stress test, in conjunction with higher mortgage rates, eroded as much as 25 per cent of the purchasing power of conventional borrowers. However, as anticipated, we are seeing the impact of that policy starting to fade and housing activity should pick up in the second half of the year. 22

3 A slowdown in home sales is occurring at a time when new home construction has never been higher. There are nearly 60,000 units now under construction across the province, including 42,000 units in the metro- Vancouver area. The much-needed supply, in tandem with the recent softening of demand, should help to trend markets toward balance. However, with residential investment nearing an all-time high as a share of GDP, it will unlikely continue to be the strong contributor to growth that it was over the past four years. gains from the mainly fiscal stimulus-driven acceleration in growth in the US economy over the next year. Given that the BC economy is likely closer to the end of the expansionary phase of the business cycle than to its beginning, and without residential investment and household spending continuing in overdrive, economic growth is expected to settle back to its longrun trend over the next two years. The good news is that because of the province s favourable demographics and continued ability to attract net inflows of skilled immigrants, the long-term trend rate of growth in the province is enviably high. Our forecast is for real GDP to expand by 2.8 per cent in 2018 and 2.5 per cent in Similarly, it is improbable that BC households, widely known to be among the most indebted in Canada, will continue to ramp up spending in the face of higher interest rates and flattening growth in home prices. That spending has been a major contributor to real GDP growth in the current expansion, including a spending binge in 2017 that saw retail sales grow at a 20-year high of close to 10 per cent. A modest tightening of household budgets will reduce growth in retail sales back to its long-run average of about 5 per cent. Trend Growth in the BC Economy The BC export sector posted robust growth in 2017, led by a 45 per cent increase in the value of energy product exports and double-digit growth in the export of paper and agricultural products. That export growth would have been even stronger if not for the imposition of soft-wood lumber tariffs that shortcircuited a rising trend of shipments. Over the next two years, growth in international exports should be supported by solid growth among BC s major trading partners. However, the anti-trade stance of the current US government may limit any potential 13

4 VANCOUVER ISLAND-COAST The Victoria, Vancouver Island and Powell River real estate boards service the Vancouver Island-Coast Region of the province. Housing demand shifted lower in the first four months of the year as tougher mortgage qualifications for conventional borrowers reduced household purchasing power and affordability. BC housing markets have benefited from the provincial economy expanding well above trend growth over the past four years. This has led to surging employment, falling unemployment rates and buoyant consumer confidence. However, economic growth is expected to slow and reflect the long-term average this year. With many sectors nearing full employment, job growth in the region is slowing. While the local economy is now firing on all cylinders, the capacity for further growth will be limited by the available labour force. Two factors mitigating a slowing provincial economy for the Vancouver Island-Coast housing market are its attractiveness to both retirees and the millennial generation. Growth in the adultaged population of Vancouver Island is being bolstered by household migration from both other regions in BC and other provinces. The large population cohort of millennials, many of whom are now entering their household forming years, is of growing importance to housing demand in the region, and will continue to be over the next several years. While migration from younger, footloose households is largely a function of employment opportunities, retirees are less susceptible to the ebb and flow of the business cycle and slower economic growth has little effect on their migration patterns. These demographic drivers are expected to underpin housing demand in the region over the next several years. 24

5 Despite these underlying fundamentals, there are headwinds in the housing market this year. The stress test on conventional borrowers means first-time buyers cannot avoid qualifying at a higher interest rate by tapping into their parents wealth. Mortgage interest rates are slowly increasing, providing an additional constraint on purchasing power and affordability. Finally, prices are already elevated, making further price gains likely only a fraction of those experienced in the past few years. Against the demand backdrop of slower economic growth, demographic pressures and affordability headwinds, the supply of homes for sale remains historically low. For example, early in the year total active listings from the Victoria Real Estate Board were at a 35-year low. While there was a modest increase in recent months, the market remains significantly undersupplied with market conditions remaining tilted in favour of home sellers. The lack of available housing supply hasn t gone unnoticed by home builders. The number of units under construction in Victoria has more than doubled over the past two years. Housing starts are up significantly in Nanaimo as well. However, the inability of home builders to supply the market in a timely way has led to rapidly rising home prices. The time between conception and completion of a multi-family project can be several years. Over the next several quarters, an expected increase in the number of new home completions will help expand the housing stock, providing much-needed supply and reducing upward pressure on home prices. 15

6 LOWER MAINLAND-SOUTHWEST The Real Estate Board of Greater Vancouver, the Fraser Valley Real Estate Board and the Chilliwack and District Real Estate Board service the Lower Mainland-Southwest region of the province. The area accounts for approximately 60 per cent of the housing demand in the province. Housing demand fell sharply over the first four months of the year, as tighter mortgage qualifications for conventional borrowers reduced purchasing power and worsened affordability. However, taking previous tightening of macroprudential policy as a guide, the negative impact is typically most pronounced three to four months after implementation. This means that housing demand will likely improve over the next several months as households retrench their finances and modify expectations. Strong performance of the BC economy over the past four years has led to significant gains in employment and a commensurate decline in the unemployment rate. Consumer confidence has been elevated, reflecting robust economic conditions and upward pressure on wages. However, employment growth is expected to slow this year as the labour force is nearly fully employed. In addition, the phenomenal growth in retail sales experienced over the past several years is slowing, with rising debt levels, higher interest rates and slower economic growth moderating household expenditures. Population growth is typically fuelled by net-migration from international sources. The marked increase in interprovincial migrants over the past few years is waning as the Alberta economy recovers from the collapse in oil prices. Population growth in Metro Vancouver has trended lower recently, growing by 1.4 per cent in the first quarter of the year. However, 26

7 this contrasts with the Abbotsford CMA where the population increased by 2 per cent in the first quarter, the highest rate in more than a decade. Vancouver and the Fraser Valley is exhibiting relative balance, while the attached and apartment markets remain significantly undersupplied. Tougher mortgage qualifications for conventional borrowers, a rising interest rate environment and already high price levels are headwinds in the housing market this year. In contrast, relatively strong population growth will help underpin housing demand. More importantly, favourable demographics will continue to generate strong demand in the first-time buyer segment as a sizable contingent of millennials are entering their household forming years. Slower housing demand has had little impact on home prices as the supply of homes for sale remains near decade lows. Total active residential listings have only edged higher over the past four months keeping market conditions tilted in favour of home sellers in most areas. However, market conditions vary by product type. The detached market in The root cause of rapidly rising home prices in the region is the inability of home builders to increase production in a timely way. It takes four to seven years from conception of a multi-family project to its eventual completion. A surge in housing demand simply cannot be met with move-in ready new supply. In the meantime, home prices can rise rapidly. There are about 42,000 housing units under construction in Metro Vancouver, well above the previous peak of 27,000 units in Many of these units will be completed this year, adding much-needed supply to the housing stock and potentially creating more balance between supply and demand. While home prices are high in the region, it s worth noting that only 3 per cent of homes sold in 2017 were above $3 million. In fact, 86 per cent of all homes sold through the MLS were priced below $1.5 million, with 71 per cent below $1 million (up from 68 per cent in 2016). Home sales through the Real Estate Board of Greater Vancouver and the Fraser Valley Real Estate Board are expected to decline 10 to 11 per cent in 2018, while home sales through the Chilliwack and District Real Estate Board are expected to decline a more modest 3 per cent. The combination of a more typical level of consumer demand and a much-needed increase in supply is expected to create less upward pressure on home prices in

8 THOMPSON-OKANAGAN Home sales in the Thompson-Okanagan region, which is served by the Okanagan Mainline, South Okanagan, and Kamloops Area and District real estate boards, were lower in 2017 after a recordsetting year prior. Despite that decline, sales were still the second highest on record for the region as a result of a strong provincial economy, robust regional employment growth, significant inflows of interprovincial migration and low mortgage rates. The BC economy has benefited from four years of above-trend economic growth, which the Okanagan region has both contributed to and shared in. Employment growth across the region surged as the area s aging population increased labour demand in the healthcare sector and vigorous new construction activity created thousands of jobs. A rebound in the forestry sector and strong export activity also provided a further boost to regional employment growth. However, there are early signs that employment growth is slowing alongside the overall economy. In addition to slower economic growth, the housing market has been negatively impacted by the implementation of a stress test for conventional homebuyers (i.e., those with more than a 20 per cent down payment). Over the first three months of 2018, home sales declined 23 per cent in OMREB and SOREB and 39 per cent in Kamloops compared to December 2017 on a seasonally adjusted basis. The impact of the B20 stress test was likely most severe over the first three months of 2018, with home sales expected to recover over the second half of the year. This year, we anticipate that home sales will slow as moderating economic growth, rising mortgage rates and the impacts of both federal and provincial policy measures impact consumer demand. Compounding the impact of the stress test, Canadian mortgage rates have been trending higher over the past year. A household that could qualify at a contract rate of 2.5 per cent one year 28

9 ago, must now qualify at a rate as much as 300 basis points higher due to the combination of higher mortgage rates and tougher mortgage qualifications. As a result, conventional borrowers have seen their purchasing power reduced by as much as 25 per cent compared to a year ago. However, it is expected that home sales will increase in the second half of the year and, consequently, will end the year down 4 to 6 per cent in the region in 2018 and a further 3 to 4 per cent in Demand may be further impacted by the implementation of the Province s so-called speculation tax. The tax will be levied on homes in Kelowna and West Kelowna that are left unoccupied for more than six months of the year. The tax presents a risk specific to Kelowna due to the region s buyer profile and the near record level of new home construction currently underway. The Okanagan region has long attracted homebuyers from outside of BC, both for retirement and for those looking for recreational property. More than 15 per cent of buyers in the OMREB region are from outside of the province, and those owners will be facing an annual 1 per cent tax if their property is unoccupied for longer than six months. Out-of-province buyers are an important source of demand in the region and the impact of the tax has the potential to disrupt current development plans. With demand already slowing as a result of the tougher mortgage qualifications, further disruption may impact the new construction industry by causing an overhang of supply and slowing of housing starts. While there are headwinds to housing demand across the region, total active residential listings in the OMREB, SOREB, and Kamloops areas remain extremely low by historical comparison. In response to very low levels of inventory in the resale and new home market, residential construction in the Kelowna CMA, Kamloops CA and Penticton CA has ramped up considerably, resulting in a surge of units currently under construction. While we do not expect that pace of homebuilding to continue in 2018, as many of these units complete over the next several quarters, the imbalance between supply and demand is expected to diminish. However, that process may take up to 18 months to play out, and in the meantime, upward pressure on home prices will likely continue. 19

10 NORTHERN BC MLS residential sales across the BC Northern Real Estate Board area (which encompasses a vast and diverse geography from 100 Mile House to Prince Rupert to Fort St. John) increased by 5.5 per cent in 2017, after trending lower over the previous two years. However, home sales are expected to edge lower this year. The combined effects of tougher mortgage qualifications and higher mortgage interest rates will temper housing demand across the province. region encompassing the BC Northern Real Estate Board area. Employment was essentially unchanged over the past four years in the Cariboo, while declining in the energy dependent Northeast. The communities of the North Coast-Nechako region managed to post modest job growth over the period, despite a tumultuous time for promising liquid natural gas projects. During that same period, home sales were generally stable in larger centres like Prince George, whereas the steep decline in oil prices in late 2014 prompted a decline in smaller communities like Prince Rupert and Fort St. John. The diversity and breadth of the BC Northern region means that aggregate statistics often mask significant variation from community to community. Due to declining commodity prices and associated economic activity, many Northern communities did not equally share in the benefits of strong provincial economic growth over the last four years. Employment growth from 2014 to 2017 underperformed the rest of the province in each economic development While the North has been lagging the rest of the provincial economy, good news is emerging. Global commodity prices, from precious metals to forestry products and energy, are on an upswing. While the North has diversified in recent years, growth in the commodities sector is an unambiguous positive development for the region and an important driver of 210

11 job growth. An expected recovery in local employment growth should help support demand this year and next, while at least partially offsetting headwinds from a more stringent mortgage qualifying environment. Although the economic outlook for the North is positive, significant challenges remain. Trade with the United States remains a risk, specifically regarding the natural resource and manufacturing sectors so important to the Northern economy. As a result, balanced market conditions are now moving toward sellers market conditions in some areas. The MLS average price for the area is up 3.5 per cent yearto-date in 2018, but average prices are up as much as 13 per cent and 19 per cent respectively in more supply constrained markets like Prince George and Quesnel. Housing affordability, particularly relative to the southern parts of the province, has always attracted buyers to the North. Many communities saw some deterioration in affordability in 2017 due to higher home prices, but in most northern BC markets the monthly cost of a home is still under 30 per cent of household income. A strengthening regional economy should provide a boost to housing demand over the next two years, but supply across the region continues to edge lower. New home construction is not expected to alleviate the downward trajectory of supply, at least in the short term. Total starts were down 13 per cent in Prince George in 2017 and we expect a further decline of 17 per cent to 225 total starts in Units currently under construction have also tailed off in the Prince George area, meaning there is not a large pipeline of new units coming to market. While higher interest rates and the impact of the B20 stress test will negatively impact homebuyers ability to qualify for a mortgage in 2018, the region s attractive affordability should remain relatively intact. As market conditions balance out over the next two years, the MLS average price is expected to increase 2.5 per cent in 2018 and 1.4 per cent in

12 KOOTENAY While nearly all markets in the province are off to a slow start in 2018 due to tightened mortgage qualification standards, the Kootenay region has been seemingly unaffected by the B20 stress test. In fact, home sales in areas served by the Kootenay Real Estate Board are up about 5 per cent over last year through the first four months of the year. However, we do expect sales to slow in the last half of 2018 as higher mortgage rates dampen consumer demand. Our forecast for 2018 is for total MLS unit sales to decline 6.5 per cent to 3,060. revenue has been climbing for a number years, particularly in the popular winter resorts in the Revelstoke and Columbia-Shuswap areas. Meanwhile, the value of BC coal exports, largely sourced from the East Kootenay, jumped nearly 60 per cent in Like the Okanagan, housing demand from Alberta and other provinces are a historically important driver of the Kootenay market. However, unlike the Okanagan regions of Kelowna and West Kelowna, the Kootenay avoided inclusion in the Province s speculation tax. Given its untaxed status, it is possible that out-of-province buyers of recreational properties may shift from the Okanagan to the Kootenay, providing at least a small boost to overall consumer demand. Demand for housing is being boosted by a local economy that appears to be thriving. Regional bellwether sectors like tourism and coal are enjoying significant growth. Hotel tourism Like most regions around the province, the supply of active listings in the Kootenay has been trending downward for several years. Currently, active listings are at a ten-year low. Strong demand and very low supply has meant that market conditions across the Kootenay have tightened significantly over the past year. As a result, the average MLS price rose nearly 9 per cent in Markets will remain supply constrained in 2018 as well, resulting in a further 5 per cent increase in prices to $322,200 this year and another 3 per cent to $332,300 in

13 BC Housing Outlook F 2019F MLS Unit Sales % change 102, , ,764 94,240 94, MLS Average Price % change MLS Dollar Volume ($billions) % change Housing Starts % change Single % change Multiple % change Total Net Migration % change Net International Migration % change Net Interprovincial Migration % change $636,607 $691,120 $709,577 $745,600 $775, $65.26 $77.55 $73.63 $70.27 $ ,446 41,843 43,664 38,400 35, ,152 12,278 12,346 10,600 10, ,294 29,565 31,318 27,800 24, ,204 56,204 59,792 52,000 47, ,377 33,734 49,590 47,000 45, ,827 22,470 10,202 5,000 2, Range of Posted 5-year Fixed Mortgage Rate (%) BC Economic Outlook F 2019F Real GDP Growth (%) Employment (millions) Employment Growth (%) Unemployment (000s) Unemployment Rate (%) Personal Disposable Income ($billions) Personal Disposable Income Growth (%) Average Weekly Wage $914 $ Weekly Wage Growth (%) Retail Sales ($billions) $71.6 $ Retails Sales Growth (%) Values have been estimated where data has not yet been released. 113

14 Lower Mainland-Southwest MLS Unit Sales 2017 % 2018F % 2019F % Real Estate Board of Greater Vancouver 36, , , Single Detached 11, , , Apartment 18, , , Townhouse 6, , , Fraser Valley Real Estate Board 21, , , Single Detached 9, , , Apartment 6, , , Townhouse 5, , , Chilliwack and District Real Estate Board 3, , , Single Detached 2, , , Apartment Townhouse MLS Average Price 2017 % 2018F % 2019F % Real Estate Board of Greater Vancouver $ 1,031, $ 1,080, $ 1,104, Single Detached $ 1,752, $ 1,720, $ 1,730, Apartment $ 647, $ 745, $ 776, Townhouse $ 861, $ 960, $ 1,004, Fraser Valley Real Estate Board $ 701, $ 752, $ 790, Single Detached $ 1,061, $ 1,105, $ 1,125, Apartment $ 326, $ 400, $ 416,686 4 Townhouse $ 540, $ 605, $ 623,150 3 Chilliwack and District Real Estate Board $ 464, $ 531, $ 552,800 4 Single Detached $ 586, $ 657, $ 683, Apartment $ 214, $ 251, $ 264, Townhouse $ 397, $ 458, $ 474, Housing Starts 2017 % 2018F % 2019F % Vancouver CMA 26, , , Single 4, , , Multiple 21, , ,500 0 Abbotsford CMA 1, , , Single Multiple 1, Chilliwack CA 1, Single Multiple

15 Vancouver Island-Coast MLS Unit Sales 2017 % 2018F % 2019F % Victoria Real Estate Board 8, , , Single Detached 4, , , Apartment 2, , , Townhouse Vancouver Island Real Estate Board 10, , , Single Detached 6, , ,000-2 Apartment 1, , , Townhouse 1, , ,140-5 Powell River Sunshine Coast Real Estate Board Single Detached Condo Single Family Mobile MLS Average Price 2017 % 2018F % 2019F % Victoria Real Estate Board $ 652, $ 685, $ 710, Single Detached $ 831, $ 868, $ 886,000 2 Apartment $ 419, $ 451, $ 461, Townhouse $ 536, $ 587, $ 610, Vancouver Island Real Estate Board $ 431, $ 464, $ 482, Single Detached $ 502, $ 522,600 4 $ 541, Apartment $ 243, $ 263, $ 273, Townhouse $ 327, $ 353, $ 362, Powell River Sunshine Coast Real Estate Board $ 316, $ 374, $ 384, Single Detached $ 343, $ 420, $ 430, Condo $ 195, $ 203, $ 204, Single Family Mobile $ 104, $ 115, $ 117, Housing Starts 2017 % 2018F % 2019F % Victoria CMA 3, , , Single Multiple 2, , , Nanaimo CMA Single Multiple

16 Thompson-Okanagan MLS Unit Sales 2017 % 2018F % 2019F % Okanagan Mainline Real Estate Board 9, , , Single Detached 4, , , Apartment 1, , , Townhouse 1, , , South Okanagan Real Estate Board 2, , , Single Detached 1, , , Apartment Townhouse Kamloops & District Real Estate Assoc. 3, , , Single Detached 2, , , Apartment Townhouse MLS Average Price 2017 % 2018F % 2019F % Okanagan Mainline Real Estate Board $ 497, $ 530, $ 547, Single Detached $ 601, $ 662, $ 675,000 2 Apartment $ 315, $ 330, $ 332, Townhouse $ 413, $ 426, $ 444, South Okanagan Real Estate Board $ 399, $ 421, $ 426, Single Detached $ 509, $ 520, $ 535, Apartment $ 257, $ 280, $ 290, Townhouse $ 350, $ 355, $ 363, Kamloops & District Real Estate Assoc. $ 365, $ 393, $ 404, Single Detached $ 425, $ 447,000 5 $ 462, Apartment $ 216, $ 245, $ 258, Townhouse $ 334, $ 406, $ 411, Housing Starts 2017 % 2018F % 2019F % Kelowna CMA 3, , , Single Multiple 2, , , Penticton CMA Single Multiple Kamloops CA Single Multiple

17 Kootenay MLS Unit Sales 2017 % 2018F % 2019F % Kootenay Real Estate Board 3, , , Single Detached 1, , , Apartment Townhouse MLS Average Price 2017 % 2018F % 2019F % Kootenay Real Estate Board $ 307, $ 322, $ 332,000 3 Single Detached $ 322, $ 325, $ 335, Apartment $ 185, $ 180,000-3 $ 190, Townhouse $ 253, $ 265, $ 267, Housing Starts 2017 % 2018F % 2019F % Cranbrook CMA Single Multiple NA Northern BC MLS Unit Sales 2017 % 2018F % 2019F % BC Northern Real Estate Board 4, , , Single Detached 3, , , Northern Lights Area Single Detached MLS Average Price 2017 % 2018F % 2019F % Kootenay Real Estate Board $ 274, $ 281, $ 285, Single Detached $ 284, , $ 301,000 2 Northern Lights Area 1 $ 248, $ 240, $ 243, Single Detached $ 273, $ 269, $ 275, Housing Starts 2017 % 2018F % 2019F % Prince George CMA Single Multiple Dawson Creek CMA Single Multiple The former Northern Lights Real Estate Board has merged with the South Okanagan Real Estate Board 117

18 Housing Forecast Summary Second Quarter Unit Sales Average MLS Price ($) Board Area F 2019F F 2019F Victoria 8,464 7,650 7, , , , % -9.6% -1.4% 25.2% 4.9% 3.6% Vancouver Island 10,038 8,760 8,640 $431,255 $464,000 $482, % -12.7% -1.4% 26.9% 7.6% 4.1% Powell River Sunshine Coast $316,773 $374,000 $384, % 5.9% -3.5% 28.4% 18.1% 2.8% Greater Vancouver 36,604 32,700 33,900 1,031,546 1,080,000 1,104, % -10.7% 3.7% 14.3% 4.7% 2.3% Fraser Valley 21,436 19,200 18,750 $701,842 $752,000 $790, % -10.4% -2.3% 21.5% 7.1% 5.1% Chilliwack and District 3,983 3,850 3,720 $464,897 $531,700 $552, % -3.3% -3.4% 38.4% 14.4% 4% Kamloops and District 3,345 3,210 3, , , , % -4% -3.4% 11.9% 7.6% 2.9% Okanagan Mainline 9,053 8,500 8,200 $497,604 $530,200 $547, % -6.1% -3.5% 21.8% 6.6% 3.2% South Okanagan* 2,430 2,300 2,200 $399,972 $421,000 $426, % -5.3% -4.3% 22.2% 5.3% 1.3% Northern Lights $248,429 $240,000 $243, % -14.4% 6.7% -7.8% -3.4% 1.3% Kootenay 3,274 3,060 2,850 $307,051 $322,200 $332, % -6.5% -6.9% 11.5% 4.9% 3% BC Northern 4,293 4,200 4,330 $274,131 $281,000 $285, % -2.2% 3.1% 3.6% 2.5% 1.4% BC Total 103,764 94,235 94, , , , % -9.2% -0.2% 11.5% 5.1% 4.1% NOTE: The Northern Lights Real Estate Board (NLREB) became part of the South Okanagan Real Estate Board (SOREB) on January 1, *Excluding Northern Lights BCREA Economics provides timely research, analysis and information on economic factors affecting British Columbia and its housing markets. The British Columbia Real Estate Association (BCREA) is the professional association for about 23,000 REALTORS in BC, focusing on provincial issues that impact real estate. Working with the province s 11 real estate boards, BCREA provides continuing professional education, advocacy, economic research and standard forms to help REALTORS provide value for their clients. Send questions and comments about the Housing Forecast to: Cameron Muir, Chief Economist, cmuir@bcrea.bc.ca; Brendon Ogmundson, Deputy Chief Economist, bogmundson@bcrea.bc.ca; To demonstrate the profession s commitment to improving Quality of Life in BC communities, BCREA supports policies that help ensure economic vitality, provide housing opportunities, preserve the environment, protect property owners and build better communities with good schools and safe neighbourhoods. Additional economics information is available on BCREA s website at: To sign up for BCREA news releases by visit: manage-subscriptions. The Housing Forecast is published quarterly by BCREA. Real estate boards, real estate associations and REALTORS may reprint this content, provided that credit is given to BCREA by including the following statement: Copyright British Columbia Real Estate Association. Reprinted with permission. BCREA makes no guarantees as to the accuracy or completeness of this information Georgia Street West, PO Box 10123, Pacific Centre, Vancouver, BC V7Y 1C6 Phone: Fax: bcrea@bcrea.bc.ca