Forecast of Metro house sales downgraded

Wednesday, September 1st, 2010

National housing agency hedges May prediction

Derrick Penner

Canada Mortgage and Housing Corp. has reduced its expectations for Metro Vancouver’s housing markets, a prediction that speaks as much to the mad rush of sales in late 2009 as it does to the slowing of sales in mid 2010.

The national housing agency predicts that Metro Vancouver will see 34,000 sales in the region’s home-resale market by the end of 2010, a 6.2-per-cent decline from 2009. And that is down from the forecast of 35,000 sales the national housing agency released in May.

For 2011, Canada Mortgage and Housing is forecasting 33,000 Metro Vancouver sales, a decline of almost three per cent from 2010.

“It’s not a huge change in terms of the forecast,” Robyn Adamache, Canada Mortgage and Housing’s senior analyst for Metro Vancouver, said in an interview.

Adamache said the region did see a surge in sales in the spring, before the implementation of the HST on new-home sales and ahead of new mortgage-qualification rules designed to keep new buyers from over-extending themselves.

Sales have slowed since then, with a corresponding increase in new listings from sellers attracted by high prices.

“I think the market is coming in line with what the economy is doing and what population growth is doing,” Adamache said.

Adamache forecasts B.C.’s population to grow by an average of 28,000 households per year due to immigration, with a majority settling in Metro Vancouver, which will bolster demand for both rental accommodation and new homes.

“As the provincial economic recovery gains traction, job gains will shift to full-time from part-time, bolstering income growth and home ownership demand,” the report said.

Canada Mortgage and Housing is forecasting that Metro Vancouver housing starts will hit 12,000 for 2010, up almost 44 per cent from 2009’s collapse of starts.

For 2011, the agency predicts Metro starts will rise to 14,000 units.

Adamache’s forecast anticipates that Metro Vancouver’s average home price will hit $655,000 by the end of 2010.

That will be almost 11 per cent ahead of the overall 2009 average price of $592,441.

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