Foreign investment will by no means be the only thing driving future growth in Vancouver’s housing market, with a new report from CMHC suggesting job growth will play a starring role in the hot market.
Net migration to Vancouver is expected to rise 11 per cent in 2014 to 26,500, driving a projected 13.2 per cent increase in MLS home sales in 2014. Housing starts for single-family properties are also expected to finish the year higher, up 5.4 per cent to 4,220.
The CMHC report said jobs growth throughout the Greater Vancouver area will support this growth. Hootsuite, a social media management company, opened its second office in Vancouver and said it intends to hire more employees in the near future. Microsoft, Samsung and Sony Picture Imageworks are also expected to add to their employee base.
“Employment conditions will attract and keep people in the Vancouver CMA and support overall housing demand,” CMHC said in its report. “The sales forecasts for both 2015 and 2016 are above the 15-year average of about 31,300 sales. Higher levels of migration as well as steadier employment growth will drive this demand.”
Average sale price also rose, hiking 5.6 per cent to $811,000. But, CMHC expects prices to moderate over 2015 and 2016, rising 1.2 per cent in 2015 to $821,000 and 1.7 per cent in 2016 to $835,000.
Those moderated prices are in line with the CMHC’s expectation that the market will increasingly demand affordable housing.
“Most of the employment gains in 2014, however, have been in generally lower-paying occupations... This supports our outlook for stronger interests in more affordable housing options over the forecast period,” the report outlined. “In fact, real average weekly earnings have steadily declined during the past ten months; real average weekly earnings in August 2014 were three per cent lower than they were in November 2013. This will help support demand for less costly housing options in 2015.”
It may well be Canada’s hottest market but a new report indicates that it’s not about to start cooling off just yet.