Residential sales are expected to drop 6.3% to 96,100 units in 2016, according to the BCREA.
“Home sales surpassed the 100,000 unit threshold for only the third time on record last year, as strong market fundamentals and elevated consumer confidence charged demand,” BCREA said in its first quarter housing forecast update. “While fewer home sales are expected this year, economic conditions remain robust and will support relatively high levels of housing demand.”
While sales are expected to take a hit this year, the association is forecasting a bounce-back in 2017.
“Strengthening economic conditions at home and abroad are expected to bolster housing consumption activity in 2017. BC MLS residential sales are forecast to increase 2% to 98,000 units next year,” the association said.
As for prices, the association is forecasting an average sale price of $677,200 in BC this year, up 6.4% year-over-year. Prices are expected to break the $700,000 threshold next year, with the association predicting a spike of 4.2% to $705,300.
Overall, the province’s economy presents favourable conditions that should benefit the housing market going forward.
“The BC economy is proving resilient to the collapse in oil prices and weak commodity demand. Consumer spending through retail sales is growing at its fastest rate in a decade, while employment in the province increased by over 2% during the latter half of 2015, with a marked increase in full-time jobs,” BCREA said. “Tighter labour market conditions have also led to a 4% rise in average wages.”
A booming 2015 will give way to a weaker 2016, according to the British Columbia Real Estate Association.