The Greater Vancouver housing market experienced a dramatic rebound this year. Residential sales increased threefold January to October on a seasonally adjusted basis, and is trending on record levels.
A marked increase in affordability during the spring induced many potential buyers into the market and the resulting momentum quickly turned a buyer’s market into a seller’s market with upward pressure on home prices.
Rising home prices are again eroding affordability and the demand that welled up last winter during the height of the financial crisis is now largely expended. This means the pace of home sales recorded this autumn will likely moderate over the coming months.
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However, despite some moderation in consumer demand, home sales in Greater Vancouver are expected to remain relatively strong through 2010. After posting an estimated 41 percent increase to 35,500 units this year, home sales are forecast to rise an additional 5 per cent to 37,100 units in 2010, well above the ten-year average of 33,000 units.
The annual average residential sales price in Greater Vancouver is estimated to decline 1 per cent to $586,000 his year. This reflects the cyclical low recorded early in the year and the recent price acceleration. The average annual price is forecast to rise 6 per cent to $620,000 in 2010. However, much of the increase will have occurred by the end of this year, with greater stability in home prices expected next year.
Housing starts in the Vancouver CMA are estimated to fall to their lowest in more than four decades this year. A sharp decline in units under construction and inventory levels that peaked at a relatively low level is setting the stage for home builders to ramp up production in 2010. The lag between conception and completion of new housing may create a period of under-supply in the new home market. This condition will help underpin price levels in both the new and resale markets in Greater Vancouver.
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