According to the British Columbia Real Estate Association’s (BCREA) updated forecast for housing transactions in British Columbia 71,400 homes will change hands on the resale market this year. This is nine percent lower compared to 2018’s total.
However, the organization predicts that in 2020 there will be 81,700 residential transactions — rebounding by a significant increase of 14%.
Mortgage Stress Test
The mortgage stress test policy change that was introduced Canada-wide in January 2018 will continue to hinder demand and hold back many buyers. However, more and more buyers will re-enter the market in 2020.
For those who are not fully clear on how the ‘stress-test’ works, buyers need to qualify for a rate that is 2 percentage points higher than what the lender is offering. As it’s been more than one and a half years since this policy was introduced, most buyers are aware of it at this point.
Supply and Demand
The economy in Vancouver and BC is relatively strong and the growing population is likely creating pent-up demand in the housing market. This pent-up demand hasn’t yet materialized in the housing market, so we’re due to see an upward trend soon.
When it comes to current attached home prices, they seem to have largely leveled out but the price of detached properties could still sink a bit lower.
But keep in mind that when sales activity increases, prices tend to follow. Because of this, we will likely see some appreciation in 2020. According to the BCREA, this is estimated at a rate of 4%.
For all those buyers out there, 2019 is an ideal year to pick up a good purchase. Whether looking for that modern top-floor condo or a detached home your family can grow into, the state of the current market and the future forecast make now an ideal time to buy.
We at the West Haven Group always recommend our buyers keep a sharp eye out for that special property. We feel confident that it won’t be long before the Vancouver real estate market is as busy as we are typically used to seeing.
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