British Columbia housing markets are expected to post an unremarkable 2012. While the inventory of homes for sale will continue to wane in most regions, consumer demand will nevertheless be constrained by modest economic growth at home and abroad. The resulting lukewarm performance in the job market will keep unemployment rates relatively high and while uncertainty around European sovereign debt will keep bond markets buoyant and mortgage rates low, the negative impact on consumer confidence will be sustained.
As a result, Multiple Listing Service® (MLS®) residential sales are expected to hover near their 15-year average of 79,000 units this year and in 2013. BC home sales are forecast to increase 2.1 per cent to 78,400 units this year and a further 2.7 per cent to 80,500 units in 2013.
Moderate employment growth, a more gradual increase in population and above average standing inventories will act as a governor on new home construction this year. Housing starts in the province are forecast to decline 5.1 per cent to 25,000 units in 2012. However, less pronounced expansion of the housing stock in 2012 will give way to a forecast 11.6 per cent increase to 27,900 units in 2013 as a gap between household formations and new home completions emerges late in the year.
Most BC markets are expected to exhibit buyers’ to balanced market conditions this year, with weaker regions experiencing improvement through 2013. While the average annual MLS® residential home price in BC climbed over 11 per cent last year, the increase was largely the result of a temporary shift in Vancouver regional demand patterns and a commensurate shift in the mix of home types sold. Pricing data in the fourth quarter of 2011 indicated a return to more typical regional sales patterns.
The average annual BC MLS® residential price is forecast to edge down 2.1 per cent to $548,500 this year and remain relatively unchanged in 2013, albeit increasing by 0.8 per cent to $553,000.