Canada’s most expensive housing market will continue to see price gains well ahead of the rate of inflation for the next two years, according to a report from a group which represents credit unions in British Columbia.
Central1, which acts as an association for credit unions in B.C. and Ontario, now says the median sale price of a home in Greater Vancouver will climb another 6.1 per cent in 2016 after a 4.5 jump this year. In 2017, the organization is predicting a 3.8 per cent increase.
“Metro Vancouver home prices have remained in the spotlight, keeping the housing affordability debate percolating in the news and social media,” wrote economist Bryan Yu, the author of the report.
His forecast comes as the Real Estate Board of Greater Vancouver’s October data showed sales in the region were 19.3 per cent higher than they were a year ago and 36.2 per cent above the long-term average for the month.
Prices have shot up, gaining 15.3 per cent over the period studied, based on the board’s benchmark price index which stood at $736,00 at the end of October. In the detached home category, Metro Vancouver prices were up 20.1 per cent from a year ago to $1,197,600.
Yu said median price growth has been generally moderate but that’s not the case with detached homes which are posting double-digit year over year increases. “This trend is showing few signs of stopping given the severe shortage of inventory in Metro Vancouver and long-term trends of limited land availability for low-density construction,” he wrote.
He notes that the “price momentum” in the Metro Vancouver area has spilled into the neighbouring Fraser Valley in cities in Chilliwack and Abbotsford-Mission. Rising demand and inventory shortages are also driving price rebounds in Victoria, Yu said.
On a province-wide basis, Central1 is calling for the median price to rise another 5.5 per cent this year, 5.9 per cent in 2016 and 2.7 per cent in 2017 when the price will reach $462,000.
Province-wide sales are expected to rise by 21 per cent this year but only 2.3 per cent in 2016. And the 0.5 per cent in 2017.