B.C. real estate: home prices forecast to rise 7.7 percent by end of 2020, and 3.7 percent in 2021
B.C. realtors expect not only to sell more homes this year and the next compared to 2019.
They also anticipate prices to rise in 2020 and 2021.
The B.C. Real Estate Association predicts 2020 to finish with a 7.7 percent increase in average price over 2019.
The BCREA also forecasts a further increase of 3.7 percent in 2021.
In Greater Vancouver, the association anticipates the average price to jump 5.9 percent over 2019.
For 2021, the average price in the region is predicted to rise 2.4 percent.
In the Fraser Valley, the BCREA expects the average price to grow 6.7 percent in 2020, and 2.6 percent in 2021.
It can be recalled that the Canada Mortgage and Housing Corporation thinks otherwise.
On June 4, 2020, CMHC predicted a nine to 18 percent decline in average home prices in the country over the next year.
The federal housing agency reiterated its dim outlook a few weeks later on June 23.
That was when CMHC released its outlook report for the summer market.
“House prices will likely fall because of uncertainty over the economy’s path,” the agency stated particularly for major urban centres.
Unlike the CMHC, the BCREA has rosy prospects, which it laid out in its third quarter housing forecast Tuesday (August 25).
In terms of sales, the association predicts 82,380 transactions in 2020, representing a 6.5 percent increase over 2020.
In 2021, the BCREA forecasts sales to rise to 96,860, for a further 17.6 percent increase.
According to the association, a “recovering economy and low mortgage rates” will “drive demand”.
The BCREA noted that market activity has been strong amid the ongoing COVID-19 pandemic.
While sales “initially fell to historic lows in April”, the association noted that the market later “soared, more than regaining pre-pandemic levels”.
The same phenomenon happened in the rest of the country.
The Canadian Real Estate Association recently reported that the residential market set a new record in July 2020.
The CREA reported that sales last month “posted the highest level of any month in history”.
According to the national association, a total of 62,355 transactions happened in July 2020, marking the "highest monthly sales figure on record going back more than 40 years".
In its third quarter housing forecast, the BCREA noted that the recession caused by the pandemic is “on pace to be one of the worst on record” for the province.
“However, looking at recent data in the housing market, it would be difficult to tell there was a recession at all,” the association stated.
The BCREA pointed out that the “explanation for the counter-intuitive performance of the housing market lies in the very unusual characteristics of the COVID-19 recession”.
“Unlike in a typical recession, many of the job losses have been felt in lower-wage, frontline service sector jobs, typically held by younger workers,” the association stated.
“Meanwhile,” the BCREA continued, “higher-wage sectors that tend to drive the ownership market have seen employment levels fully recover.”
“As a result, sales activity has spiked as record-low mortgage rates unleashed a wave of pent-up demand previously sidelined by the pandemic,” the association explained.