Low mortgage interest rates are expected to “underpin” housing demand in B.C. through 2012, according to the B.C. Real Estate Association (BCREA).
Multiple Listing Services (MLS) sales are forecast to edge upward 3.8% to 77,500 units this year, according to the BCREA’s third quarter housing forecast update, published Thursday.
The forecast is expected to top 80,300 units in 2012, the organization said.
“Slower than expected employment growth is expected to keep B.C. home sales below their 10-year average,” commented BCREA chief economist Cameron Muir. “However, weaker global economic growth and recent uncertainty in the equity markets points to continued low mortgage interest rates, which will help underpin housing demand.”
Greater Vancouver unit sales are expected to climb 7.9% to 33,600 units this year compared with last, and increase another 2.7% to 34,500 units next year.
This while the average MLS price in Greater Vancouver is expected to jump 13.8% to $769,000 this year, before edging down 3.5% to $742,000 next year.
Unit sales and prices are also expected to increase in the Fraser Valley, while Victoria and Vancouver Island will see declines in unit sales this year before they increase in 2012.
“Following a decade where unit sales broke all records, consumer demand over the next few years will be relatively moderate,” said Muir.
Chinese merger and acquisition activity in Canada is shifting away from the resource sector toward machinery, equipment and consumer sectors.
This according to a PwC report published Thursday, which found that the resource sector represented a lower proportion of China’s outbound deals for the first time this year.
The report showed that resources accounted for 27% of Chinese deal activity in Canada in the first half of 2011 compared with 36% during the same period last year.
This while machinery, equipment and consumer sector deals increased to 36% of overall activity in the first half compared with 23% last year.
PwC said although outbound Chinese deal activity in Canada is expected to increase in the years ahead.
“Canada is not a major recipient of outbound [merger and acquisition activity] by China, compared to other countries, unless the transactions are related to raw materials and energy,” said Krisitan Knibutat, PwC’s national deals leader. “As production of Chinese goods continues to move up the value chain and China evolves into a consumer-led economy, buyers will be most keen to acquire more industrial know-how, technology and brands.”
Knibutat said this type of activity is already underway in Europe, which accounts for the great proportion of Chinese outbound deal activity.
“Distressed conditions in Europe present Chinese buyers with compelling value propositions,” said Ken Su, a transaction services partner with PwC in Beijing. “This may be a signal to North American buyers of what lies ahead.”
Joel McKay
Twitter:jmckaybiv