British Columbia’s housing market is not likely to see the same “soft landing” in 2014 and 2015 as the nation as a whole, according to the latest forecasts in the Canada Mortgage and Housing Corporation (CMHC) Third Quarter Housing Market Outlook British Columbia Highlights.
Housing starts in the province are expected to remain balanced, with a total of 27,500 homes expected to be built in 2014 and 27,900 homes in 2015.
“While housing demand [in BC] will be supported by stronger economic and employment growth, total housing starts will remain relatively stable due to a well-supplied resale market and inventory of newly completed and unabsorbed units,” said Carol Frketich, CMHC’s BC Regional Economist.
CMHC forecasts the average BC home price to be $553,300 in 2014 and $556,500 in 2015. The 2014 prediction would represent a 2.95 per cent increase over the BCREA’s stated 2013 average house price of $537,414, and suggests a more modest rise than the BCREA’s recent forecast that average BC house prices will rise 5.6 per cent to $567,300 in 2014.
The CMHC also predicts that BC home resales through the Multiple Listings Service® (MLS) will total 78,200 units in 2014 and 78,700 units in 2015, compared with the BCREA’s figure of 72,936 units in 2013.
The steadily rising BC statistics compare with the agency’s nationwide figures, which predict that housing starts will to drop slightly to a point forecast of 184,800 units in 2014 and 183,100 units in 2015 – compared with the 187,923 units that were built in 2013.
“Recent trends have shown an increase in housing starts, which is broadly supported by demographic fundamentals. However, our latest forecast calls for starts to edge lower as builders are expected to reduce inventories instead of focusing on new construction,” said Bob Dugan, chief economist for CMHC.
CMHC’s point forecast for Canada’s average MLS house price is a 4.5 per cent increase to $399,800 in 2014 and a further 1.8 per cent rise to $406,800 in 2015.
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