File photo. (Ragnar Haagen/News staff)

‘Subdued’ housing market predicted in B.C. through 2021: report

The Central 1 Credit Union report predicts “rising but subdued sales” over the next three years, with little movement in median home prices.

Another dismal forecast for British Columbia’s housing market, one day after the Canadian Real Estate Associate predicted home sales will continue to dip in the province next year.

Central One Credit Union, which provides services to more than 300 credit unions across Canada, says in its housing forecast for 2018 to 2021 that B.C. experienced a “mild provincial housing recession” this year.

The report points to the federal government’s mortgage stress test, higher interest rates and various provincial policy measures for the downturn and predicts “rising but subdued sales” over the next three years, with little movement in median home prices.

Bryan Yu, Central 1’s deputy chief economist, says builders have noted the shift and the result is a sharp drop in housing starts since September, especially in urban areas.

He says starts in B.C. are predicted to fall to about 32,000 units in each of the next two years after nearly 40,000 units were under construction this year and 43,500 in 2017.

But the update also predicts positive housing market outlooks in some areas, including Vancouver Island, where retirees fuel the market, and in Northern B.C., where demand is boosted by a liquefied natural gas project and associated pipelines.

Read more: B.C.’s skyrocketing real estate market will ‘correct’ in 2019: analyst

Read more: Vacancies remain low as rents rise in B.C.

As work ramps up on the $40-billion LNG Canada project in and around Kitimat, Central 1 says housing markets in the north are forecast to outperform those in southern B.C., which were hit the hardest this year.

“Sales in B.C.’s combined metro markets of Vancouver, Abbotsford-Mission, Kelowna and Victoria are down 40 per cent compared with the end of 2017, led by the Lower Mainland markets,” Yu says in a news release.

The report shows annual resale home transactions plunged 17 per cent in 2018 and median resale prices slipped two per cent to $520,000.

“Gone are the days of rapid price escalation,” says Yu.

Negative growth in residential investment will drag on the broader B.C. economy, but the Central 1 update says the effect should be blunted by ongoing consumer demand linked to the lowest unemployment rate in Canada, high job vacancy rates, wage gains and population growth.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

BC Liberal Party Shuswap candidate Greg Kyllo and wife Georgina celebrate another successful campaign, with preliminary results for the 42nd provincial general election showing Greg winning the riding with a comfortable majority. (Jim Elliot-Salmon Arm Observer)
Shuswap’s Greg Kyllo faces third term and BC NDP majority

BC NDP candidate Sylvia Lindgren celebrates party’s success

B.C. Green Party leader Sonia Furstenau outlines her party's climate action platform at Nanaimo's Vancouver Island Conference Centre earlier this month. (News Bulletin file photo)
Green leader Furstenau declared victor in her home riding on Vancouver Island

Cowichan Valley voters elect freshly minted party leader for her second term

John Horgan has been re-elected the MLA for Langford-Juan de Fuca. (File-Black Press)
Horgan trounces challengers to be re-elected in his Vancouver Island riding

MLA has represented constituency of Langford-Juan de Fuca and its predecessors since 2005

The Sicamous Eagles recently moved into the “Eagles’ Nest” dormitory behind the Sicamous and District Rec Centre. (Jim Elliot/Eagle Valley News)
Sicamous Eagles move into dormitory on arena grounds

The KIJHL hockey team’s billet system was strained by COVID-19 so they are piloting a new solution

After dragon boat races, the Carnation Ceremony remembers those who have died and those who are fighting cancer. This year, during Breast Cancer Awareness Month, the Friends Abreast Dragon Boat team delivered 400 carnations to the staff at nine public schools, three SASCU offices and the women’s league at the curling rink as a reminder for women to book their mammogram appointments. (File photo)
Salmon Arm dragon boat team gives carnations as mammogram reminder

Breast cancer second leading cause of cancer death among Canadian women

(Image by Ulrike Leone from Pixabay)
QUIZ: A celebration of colour

Fall in British Columbia is a time to enjoy a spectrum of vivid colours

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Canada’s Chief Public Health Officer Theresa Tam responds to a question during a news conference Friday October 23, 2020 in Ottawa. Canada’s top physician says she fears the number of COVID-19 hospitalizations and deaths may increase in the coming weeks as the second wave continues to drive the death toll toward 10,000. THE CANADIAN PRESS/Adrian Wyld
Canada’s top doctor warns severe illness likely to rise, trailing spike in COVID-19 cases

Average daily deaths from virus reached 23 over the past seven days, up from six deaths six weeks ago

Voters are saying they felt safe voting in person despite the current pandemic. (Phil McLachlan - Capital News)
Central Okanagan voters talk about their pandemic election experience

Despite an election taking place during COVID-19, residents said they felt safe voting in person

Efforts to replace the aging Rutland Middle School have been put off by another year by the ministry of education. (File photo)
Education ministry won’t replace Central Okanagan school anytime soon

New Westside Secondary top priority for ministry of education

Cole Collingwood casts his mock ballot at Vernon’s Mission Hill Elementary School ahead of the provincial election Oct. 24, 2020. (Brendan Shykora - Morning Star)
PHOTOS: Okanagan students cast mock election ballots

At Mission Hill Elementary, the election is a chance to learn about the democratic process

Thanks to efforts by a Kelowna shelter and Elections BC, anyone who wishes to can vote in the 2020 BC Provincial Election, even if they don’t have a fixed address. (THE CANADIAN PRESS/Darryl Dyck)
Kelowna group ensures people experiencing homelessness can vote

Shelter supervisor says voting ‘a fundamental right’ even for those without a fixed address

(Big White Ski Resort photo)
Big White receives 21 cm of snow in 24 hours

Resort’s snow base 41 cm deep, one month until opening day

Most Read