Even Vancouver’s housing market isn’t immune to a slowing economy.
The Canada Mortgage and Housing Corp. (CMHC) forecasts demand for the city’s red-hot real estate will slow in 2016 and 2017.
Multiple Listing Service (MLS) sales in Metro Vancouver are expected to decline from an estimated 41,800 this year to 38,400 by the end of next year, according to data released Monday (October 26).
By 2017, the CMHC forecasts MLS sales will fall to 37,400 across the region.
CMHC chief economist Bob Dugan said housing market activity in B.C. and Ontario has been boosted by lower energy prices, lower mortgage rates and a lower Canadian dollar.
While those factors have offset declines in oil-producing provinces like Alberta, he expects this “counterbalancing” effect to decline over the next two years.
Prices throughout Metro Vancouver are also expected to “moderate” over that same period, according to the CHMC’s report.
The average MLS price for 2015 is pegged at $887,600 and is projected to rise 3% to $914,100 by next year. By 2017, that growth is expected to dip to 2.1% with an average price of $933,200.
"Demand for homes in Vancouver is well supported due to a strong labour market, low mortgage rates and steady population growth," said Richard Sam, the CMHC's market analysis for Vancouver, said in a statement.
But the report noted mortgage rates will likely rise in 2016, curtailing some of the demand in the nation’s overall housing market.
The MLS sales and prices for Metro Vancouver is based on data from the Real Estate Board of Greater Vancouver, which does not include Surrey, Langley, North Delta and White Rock.
