BC Housing Starts, Sales and Prices to Rise as Canada’s Slow Down: CMHC

Monday, May 25th, 2015

BC activity to remain strong and benefit from falling energy prices, as oil-producing provinces continue slowdown over next two years, according to market outlook

Joannah Connolly

BC housing starts will rise 1.2 per cent from 2014, ranging between 26,400 and 29,800 units in 2015 and rising to 26,100 to 30,500 units in 2016, according to the latest Housing Market Outlook published May 25 by the Canada Mortgage and Housing Corporation (CMHC).

“Housing starts remain relatively stable this year and next, supported by growth in employment and population,” said Carol Frketich, CMHC’s BC regional economist.

“Multiple-family starts will be stable in 2015 and then pick up in 2016 as demand for denser housing forms increases and inventories of completed and unabsorbed units are drawn down. Single-detached home starts are expected to remain relatively unchanged over the forecast horizon.”

This compares with the corporation’s national forecast that housing starts across Canada will dip slightly to between 166,540 and 188,580 units in 2015, and between 162,840 units to 190,830 units in 2016. The CMHC added that there were “a number of risks and vulnerabilities that can affect the market outlook for Canada and each province” that are accounted for in the forecast ranges.

“Lower oil prices are contributing to disparities between provincial housing markets. A slowdown in housing starts and resale transactions in oil-producing provinces such as Alberta will be partly offset by increased housing market activity in other provinces, such as Ontario and British Columbia, which benefit from the positive impacts of declining energy prices, a lower Canadian dollar and continued low mortgage rates,” said Bob Dugan, chief economist for CMHC.

MLS home sales in BC are forecast to continue their rise, propped up by job and population growth and continued low mortgage interest rates. The CMHC said sales will range from 82,300 to 93,100 transactions in 2015 and between 78,700 to 91,800 transactions in 2016.

The MLS average price is forecast to be between $573,700 and $627,500 in 2015, rising again to between $577,000 and $652,000 in 2016.

Across Canada, MLS sales are expected to range between 437,100 and 494,500 units in 2015 and between 424,500 units and 491,300 units next year.

The national average MLS price is forecast to be between $402,139 and $439,589 in 2015. For 2016, the average MLS price is forecast to be between $398,191 and $457,200.

© 2015 Real Estate Weekly

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