High hopes for B.C. housing market upswing in 2010

Friday, August 28th, 2009

Uptick in sales is ‘brightest light’ in otherwise dismal economic picture


A better housing sales season is a bright spot in a gloomy economy, says the B.C. Real Estate Association’s forecast for 2010. Photograph by: Ric Ernst file, The Province

The B.C. Real Estate Association is forecasting a better sales season this fall than last, hoping to see the last of the housing recession.

In its latest third-quarter housing forecast, the association predicts that Multiple Listing Service residential sales will go up 15 per cent this year over last year.

In 2008, there were 68,923 units sold in the province, a sales drop of 33 per cent, according to the report. By the end of 2009, the provincial real-estate board, which represents the interests of 12 regional real-estate boards and more than 17,500 B.C. realtors, hopes to see 79,400 units sold, up 15 per cent from 2008’s lows.

In 2010 they are aiming for 84,200 units sold, an increase of six per cent over this year.

The 10-year-average for sales is 82,800 units.

The BCREA also anticipates that more homes can be sold in 2010. It is forecasting a sales increase of six per cent across the province for 2010.

“After twelve months of significant volatility in B.C.’s housing markets, greater stability is expected through 2010,” BCREA chief economist Cameron Muir said.

It expects growth in 2010 in Greater Vancouver with a predicted four-per-cent increase, in the Fraser Valley with a five-per-cent increase, and in Victoria with an anticipated nine-per-cent increase.

Double-digit sales increases over 2009 are forecast for the Sunshine Coast (15 per cent), the Northern Lights (12 per cent), Okanagan Mainline ( 12 per cent), and Kootenay (11 per cent) real-estate boards.

All of the boards had sales declines in 2008, and in some regions sales were down as much as 39 per cent. All but three regions had better sales rates in 2009 over 2008. In 2010, all boards are expected to be in positive territory. With an assumption of better sales comes an anticipated increase in sales volumes.

In 2009, $35.8 billion of real estate changed hands. In 2010, the real-estate industry hopes to see $38.5 billion in sales.

The association also made predictions on a rebound in housing starts.

This year has so far been a “dismal” one for housing starts, the association said, with a forecast total decline of 57 per cent by the end of this year compared to 2008, which was also a low year (starts in 2008 were down 12 per cent).

That comes to a total of just 14,800 units built in 2009, the lowest level of activity since 2000.

In 2010, the association predicts, starts in the province will regain some ground, with an estimated 18,500 units forecast to be built. Muir cautioned, though, that recovery would be spotty.

“Market conditions vary depending on the region of the province,” he said, adding that while Vancouver and Victoria have shown improvement, “interior markets are demonstrating a more gradual trend toward balance between supply and demand.”

The association noted that the uptick in housing sales over the traditionally strong spring/summer season is the “brightest light” in an otherwise dark B.C. economy.

It points out that overall, “economic output is expected to contract 2.2 per cent this year, with employment down 2.8 per cent and unemployment rising to an annual rate of 7.7 per cent.”

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