Multiple Listing Service® (MLS®) residential sales in British Columbia are forecast to increase 9.8 per cent to 80,100 units this year, after increasing 7.8 per cent to 72,936 units in 2013. This will be the first time in five years that annual MLS® residential sales will eclipse the 80,000 threshold, reaching the 15-year average. After a relatively weak first quarter, home sales rose sharply in the second quarter as record low mortgage interest rates and relatively stronger economic conditions helped invigorate consumer confidence.
Rising consumer demand is broad-based across the province. While demand in the South Coast markets quickly bounced back after the recession, many Interior markets struggled to achieve even a modest level of home sales. That dynamic is now changing as some of the strongest gains in unit sales this year are expected in the Okanagan and the Kootenays.
Economic conditions in the province are on an upward trend. Retails sales are now rising at the pre-recession average; total net migration is rebounding and expected to climb by 14 per cent this year, while interest rates continue at rock bottom levels. In addition, stronger global economic growth both this year and next will lead to rising demand for BC exports. Exports to the US are already up more than 12 per cent this year. More robust economic growth is expected to turn around the anemic pace of job creation and further bolster overall housing demand. MLS® residential sales are forecast to increase a further 4 per cent to 83,300 units in 2015. For comparison, a record 106,300 MLS® residential sales were recorded in the province during 2005.
The housing stock is generally expanding alongside overall population and household growth. While imbalances exist in many localized markets, a rapid acceleration in residential construction activity appears to be unlikely through 2015. After increasing 1 per cent to 27,000 last year, housing starts are expected to increase 1.8 to 2 per cent both this year and next, with total housing starts cresting at 28,000 units in 2015.
Market conditions around the province are now on a much stronger footing than at the start of the year. Most BC real estate board areas are exhibiting balanced conditions, with Vancouver, the Fraser Valley and the Okanagan beginning to flirt with sellers’ market conditions. The average MLS® residential sales price is forecast to rise 5.6 per cent to $567,300 this year, on the strength of the detached market. Stronger demand for condominiums in 2015, combined with an edging up of interest rates is expected to keep the provincial average price statistic increasing in the 1 to 2 per cent range.