Vancouver is already Canada’s most expensive housing market, and a new report suggests prices will continue to rise well ahead of the rate of inflation for the next two years.
A report by Central1, an association for credit unions in British Columbia and Ontario, predicts that the median sale price of Greater Vancouver homes will rise 6.1% in 2016, after a 4.5% rise this year. The report projects a 3.8% jump in 2017, according to the Financial Post.
“Metro Vancouver home prices have remained in the spotlight, keeping the housing affordability debate percolating in the news and social media,” economist Bryan Yu wrote in the report.
Meanwhile, sales in the Vancouver area were 19.3% higher in October than they were a year ago, and running 36.2% above the long-term average for the month, according to data from the Real Estate Board of Greater Vancouver.
Prices have gained 15.3% over the period studied by the board, based on its benchmark price index, according to the Financial Post. That index stood at $736,000 at the end of last month. In the detached home category, the board found Metro Vancouver prices had risen 20.1% from October of 2014 to $1,197,600.
Yu said that while overall price growth has been moderate, detached home prices are skyrocketing, posting double-digit increased year over year.
“This trend is showing few signs of stopping given the severe shortage of inventory in Metro Vancouver and long-term trends of limited land availability for low-density construction,” he wrote.
And the price momentum in the Metro Vancouver area is spilling into neighbouring areas, Yu said. Central1 projects median prices throughout British Columbia to rise another 5.5% this year, with further price gains of 5.9% in 2016 and 2.7% in 2017. Sales, meanwhile, are expected to rise by 21% this year, but only 2.3% in 2016 and 0.5% in 2017.
Although the market in the Okanagan is separate from Vancouver, we could still see a minor increase as well. The worst that can happen is that the prices stabilize in these times of uncertainty. This is still an area that people desire to move to.