VANCOUVER-- A new report suggests that low mortgage rates combined with a growing population and an improving economy bode well for Metro Vancouver home sales for the rest of 2010 and 2011.
“For the next year, we’re looking at favourable mortgage rates, a steady flow of migrants to the Lower Mainland, and a growing job market,” Canada Mortgage and Housing Corp. senior market analyst Robyn Adamache said in an interview about the federal agency’s housing market report that concluded sales will remain stable until mid-2011 before trending higher. “We’re looking at about 33,000 sales for Greater Vancouver [in 2011]. We’re looking at 31,000 this year. The 10-year average is about 34,000.
“Balanced market conditions that have been established in recent months will continue over the next nine to 12 months.”
The B.C. Real Estate Association also predicted in its fall housing forecast last week that B.C. housing sales, while declining 12 per cent this year to 74,950 units, will increase six per cent to 79,700 in 2011.
Adamache said that fewer new listings coming onto the market due to modest price growth, and a steady pace of sales will continue to gradually draw down the inventory of resale homes for sale.
The CMHC report predicted that the average home price in Metro Vancouver will increase 12 per cent in 2010 to $665,000, with most of the increase already having taken place. Prices are forecast to increase by three per cent next year to $685,000.
As well, new home construction in Vancouver will increase in 2011, approaching the 10-year average level as demand for new housing strengthens. “Homebuilding will increase modestly next year as developers seek to add to the stock of housing to accommodate approximately 16,000-18,000 new households each year,” said Adamache.
CMHC noted that housing starts across the province will also hold steady this year before gradually rising in 2011.
“Builders are expected to begin construction on more new homes next year in response to steady housing demand,” CMHC’s B.C. regional economist Carol Frketich said about the forecast of just under 26,000 total starts for 201, slightly below the 10-year average.
Nationally, CMHC said home construction is expected to continue easing in the final quarter of this year before stabilizing in 2011.
The BCREA reported Monday that residential sales in B.C. declined 36 per cent to 5,507 units in October compared to the same month last year. The average price climbed six per cent to $521,859 in October compared to the same month last year.
“B.C. home sales have posted moderate gains since the summer months,” added BCREA chief economist Cameron Muir in a statement.
Year-to-date, B.C. residential sales dollar volume declined two per cent to $32.5 billion, compared to the same period last year. Residential unit sales declined 10 per cent to 64,735 year-to-date.
The report stated that the average residential price in B.C. is forecast to climb seven per cent to $498,500 this year and decline by one per cent to $495,600 in 2011.
Meanwhile, the City of Richmond is reporting that after a sluggish 2009, a record has been set in 2010 for total building permits issued in a year.
The city reported that at the end of October it has processed 1,511 building permits with a construction value of over $769 million, greatly exceeding the $163 million value in 2009 and beating Richmond’s previous record of $658 million in 2006.
“While the sheer number of projects is impressive, the city has taken a sustainable approach to development that was well thought out in our City Centre Area Plan,” Mayor Malcolm Brodie said in a statement.