B.C. average home price and sales level to 2023, showing steep drop in sales expected next year. (Central 1)

B.C. average home price and sales level to 2023, showing steep drop in sales expected next year. (Central 1)

Forecast calls for B.C. home sales to ‘explode,’ then drop off

Average price to rise another 10% in 2021, credit unions say

B.C.’s red-hot pace of real estate sales will grow by another 37 per cent in 2021 and then drop by 21 per cent in 2022, but prices will continue their upward climb, according to a new forecast by credit union group Central 1.

The median retail price of a B.C. home is projected to increase by 10 per cent this year to $643,000, another 4.2 per cent to $670,000 in 2022, and three per cent to $690,000 in 2023, despite the expected peak and sharp decline in sales activity. Housing starts driven by demand are also expected to increase 10 per cent this year, then level off for 2022 as immigration to Canada has slowed down.

“Year-over-year sales growth will explode in the coming months, following a doubling of MLS home sales observed between March 2020 and March 2021, reflecting record levels of current sales and weakness early in the pandemic period,” Central 1 chief economist Bryan Yu said in his latest B.C. housing market analysis.

Prior to the COVID-19 pandemic, foreign purchasers were the focus of government action, with the former B.C. Liberal government imposing a foreign buyers’ tax and the NDP government following up with its speculation and vacancy tax that also levied its highest rate on property owners outside of Canada.

RELATED: Bidding wars driving up Lower Mainland home prices

RELATED: Rent freeze, construction rules contribute to shortage

With foreign purchasing down to 1.5 per cent of the total, Yu described a “perfect storm” of demand from people in higher-paying jobs working from home and saving for down payments as travel and recreation spending was shut down. And governments have been preoccupied with the pandemic.

“The lack of government intervention may reflect limited tools to temper the market, given the surge of activity is driven by domestic buyers who have strong credit and are already subject to mortgage stress tests,” Yu said. “The primary drivers of the current boom are low borrowing costs and a shift in household pandemic preferences. Both are outside the control of policy makers and are expected to naturally wane as the pandemic eases.”


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

BC legislatureCoronavirusReal estate

Just Posted

Teslyn Bates, a Grade 11 student at Salmon Arm Secondary, was among four musicians from the Shuswap who won awards at the 2021 Virtual Performing Arts BC Festival held June 1-5. (Contributed)
Province takes note of young Shuswap musicians at June festival

Four local contestants receive awards at 2021 Virtual Performing Arts BC Festival

Shuswap Immigrant Services Society plans to hold a vigil on Friday, June 25 at 8 p.m. to honour the victims of what officials are calling a terrorist attack on five Muslims in London, Ont. (File photo)
Salmon Arm council holds minute of silence to honour victims of Ontario attack

Shuswap Immigrant Services Society plans vigil for Muslim family on June 25, 8 p.m. at McGuire Lake

A first-dose mobile vaccination clinic is being held on Tuesday, June 15 from 11 a.m. to 6 p.m. at the Salmon Arm fairgrounds, west entrance across from spray park. (Interior Health image)
Location for Salmon Arm’s June 15 COVID-19 mobile vaccine clinic changes slightly

Immunization clinic still at fairgrounds but people attending asked to use different entrance

Felix Haase and Jayme Saretzky staff a pop-up booth to support the Salmon Arm Pride Project on the patio of the newly reopened Wild Craft Mercantile at 121 Shuswap St. on Saturday, June 12, 2021. (Martha Wickett - Salmon Arm Observer)
Wild Craft Mercantile in Salmon Arm holds grand reopening, celebrates Pride month

Store moves from Lakeshore to Shuswap, demonstrates support for Pride project

Tim Gibson joined the Shuswap Children’s Association on June 14, 2021. He is taking over the executive director position as June Stewart is retiring on June 30, 2021. (File photo)
New executive director joins Shuswap Children’s Association

Outgoing executive director June Stewart to retire on June 30, 2021

People watch a car burn during a riot following game 7 of the NHL Stanley Cup final in downtown Vancouver, B.C., in this June 15, 2011 photo. THE CANADIAN PRESS/Geoff Howe
10 years ago: Where were you during the 2011 Vancouver Stanley Cup Riots?

Smashed-in storefronts, looting, garbage can fires and overturned cars some of the damage remembered today

Annamie Paul, leader of the Green Party of Canada, speaks at a news conference on Parliament Hill in Ottawa, on June 10, 2021. THE CANADIAN PRESS/Justin Tang
Green Leader Annamie Paul facing no-confidence motion from party brass

move follows months of internal strife and the defection of MP Jenica Atwin to the Liberals

Two e-scooters parked on the sidewalk along Water Street in downtown Kelowna on Monday, May 3. Scooters parked on walkways are causing accessibility issues for some people with disabilities. (Michael Rodriguez/Capital News)
Helmet selfies and sober pledges: Changes coming after rough e-scooter rollout in Kelowna

A number of changes are coming to Kelowna’s e-scooter program, more could be on the way

Glen Lennon now resides in a neat and fully serviced unit in the Silver Crest Retirement Home, managed by Princeton and District Community Social Services. Photo Andrea DeMeer
Princeton RCMP and social workers find new home for elderly accident victim

“I love the sun and the sun shines on my patio here. I can go out and walk around.”

Tulips bloom in front of the Supreme Court of Canada in Ottawa, Thursday, May 10, 2018. Day two of a full week of scheduled hearings will be heard in Federal Court today on a case involving Indigenous children unnecessarily taken into foster care by what all parties call Canada’s “broken child welfare system.” THE CANADIAN PRESS/Sean Kilpatrick
AFN slams Ottawa for ‘heartless’ legal challenge of First Nations child compensation

2019 decision awarded $40,000 to each Indigenous child removed before 2006

Ivy was thrown out of a moving vehicle in Kelowna. Her tail was severely injured and will be amputated. (BC SPCA)
Kitten thrown from moving vehicle, needs help: Kelowna SPCA

The seven-month-old kitten had severe tail and femur injuries

Vernon Elks Lodge secretary-treasurer Maureen Sather says special relief funding for the organization courtesy of Community Futures North Okanagan has been just that: a relief. (Photo submitted)
Zero funding for Vernon Elks club

Once-in-100-years grant denied after back and forth with city for support

Lyndsay Fillier and Braden Taylor have been living the van life for four years and they've detailed the first year of their adventures in a new book. (Twila Amato/Black Press Media)
VIDEO: Okanagan couple details first year of van life in new book

Lyndsay Fillier and Braden Taylor have been living the van life for four years

A young child was taken to hospital after being struck by a vehicle on 30th Avenue in Vernon Friday, June 11, 2021. (Jennifer Smith - Morning Star)
Child OK after being hit by car in Vernon

Father says daughter was back home by supper time

Most Read