The strong sellers’ market appears to be nearing an end in this province. The British Columbia Real Estate Association expects more modest housing-price increases in 2008 compared with the previous year across most of the province. The only exceptions are the Chilliwack and District Real Estate Board’s and the Victoria Real Estate Board’s areas, where the average multiple-listing-service prices are forecast to rise at slightly higher rates than in 2007.

In a report issued on May 6, the BCREA predicts that the average MLS price will rise from $570,795 to $621,000 in 2008 in the area covered by the Real Estate Board of Greater Vancouver. That’s a nine percent annual increase, down from a 12 percent rise the previous year. The BCREA predicts that in 2009 the average MLS price in the REBGV’s area will rise another five percent to $651,000.

Unit sales in the REBGV’s area are expected to fall eight percent in 2008 to 35,900, followed by a three percent dip in 2009 to 34,800. “The combination of eroding affordability and weaker economic growth are trending home sales away from historically high levels,” the report states.

The REBGV does not collect data on Surrey and Langley, which are part of the Fraser Valley Real Estate Board. There, the BCREA predicts a six percent rise for housing prices in 2008 to $450,000, followed by a three percent increase in 2009 to $465,000. Unit sales are expected to fall nine percent this year in the Fraser Valley compared with the previous year.

“After six years of a strong sellers’ market, it is welcome relief for many homebuyers,” the report noted. “BC’s housing markets continue to be underpinned by robust employment growth, elevated net migration and strong consumer spending. In addition, mortgage rates are stable, with some downward pressure expected before year end.”

The BCREA’s chief economist, Cameron Muir, who was involved in preparing the report, has come under fire in the past from local bloggers who expect a U.S.–style housing correction rather than the gradual cooling the BCREA is predicting. So far, however, Muir hasn’t been proven wrong.

In the first quarter of 2008, housing starts rose 15 percent across the province when compared with the first quarter of 2007. The report also states that constraints on capacity in urban areas and the tightening of credit for developers will limit new construction activity.