Residential sales will increase 9.8% to 80,100 units in 2014, making it the first time since 2009 that sales climb above 80,000, according to the British Columbia Real Estate Association’s (BCREA) housing forecast update released July 31.
Second-quarter home sales grew sharply after poor sales in Q1, driven by record-low mortgage interest rates and improving economic conditions, leading to increased consumer confidence.
Migration is expected to increase 14% and interest rates will continue to remain low, forecasts the BCREA. Exports will grow due to a strengthening global economy, with exports to the United States already increasing 12% this year.
Some of the strongest sales will be seen in the Kootenays and Okanagan, which had struggled after the recession while sales in the Lower Mainland rebounded relatively quickly.
Sales are forecast to grow an additional 4% in 2015, to 83,300 units. This still remains well below 2005’s record sales of 106,300.
Housing stock is expected to increase at the same levels of population and household growth.
The average home price will jump 5.6% in 2014 to $567,300. A further increase of 1.4% to $575,400 is expected in 2015.
“Since the housing stock is generally expanding at the same pace as population and household growth, rapid escalation of home prices is not expected over the next two years,” said BCREA chief economist Cameron Muir.
Housing starts will increase 1.8-2% in both 2014 and 2015, when they will reach their peak at 28,000.
