Sukhi Kang 604-377-1246 www.SukhiKang.com
The Central 1 Credit Union is predicting that the British Columbia housing market slump will pick up later this year but economists caution not to expect a swift recovery.
In its annual forecast released Wednesday, the credit union predicts home sales in the province will gather a bit of strength this fall and hold steady for the rest of the year, but notes a return to better days will be slow and weak.
"The year-long correction in home sales is likely to bottom out in the first quarter of 2013 and we'll see a slow recovery through the rest of the year. But the gains will be modest," said Bryan Yu, an economist with the credit union.
Last year saw a 12-year low in sales, with only 64,400 sold (compared with 76,817 in 2011,) and Yu anticipates there will be slightly fewer homes sold this year.
He said the resale housing market is hampered by sluggish employment and population growth as well as tighter mortgage requirements that have pushed some first-time buyers out of the market.
Following last year's four per cent decline, the credit union expects the province's median annual price to slip five per cent in 2013 to about $363,000, a level last seen in 2009.
In Greater Vancouver, annual resale activity is forecast to decline about four per cent this year to 31,500 homes.
The median price will dip six per cent to $474,000 but is expected to rise by the end of 2013, according to the forecast.
The report also says house sales in the Okanagan, Kootenay and Vancouver Island are expected to rise but for now remain near recessionary levels because of weak demand and excess inventory.
Yu predicts stronger economic conditions should increase housing starts by 2014, after they declined late last year because of falling prices and excess supply.
However, the uptrend will be tempered as interest rates are expected to rise from record lows, he said.