CMHC Predicts Continued Market Slowdown
New and resale housing market activity in BC’s urban centres will continue to slow in the coming year, according to Canada Mortgage and Housing’s (CMHC) newly released Housing Market Outlook.
The causes include higher mortgage rates, stricter borrowing requirements, slower economic growth, stalling population growth, and housing-related policy changes.
In the Vancouver Census Metropolitan Area (CMA), CMHC forecasts lower home sales, higher inventories of homes for sale, and lower home prices compared with recent market highs.
While resales are expected to rebound in later 2019, they’ll remain below the levels seen in 2015 – 2017.
With resale market prices decreasing and a record number of new units under construction, housing starts will decline in the Vancouver CMA over the next two years. Construction of new homes will stall as inventories of unsold homes rise.
There will be more new rental projects under construction resulting from tight rental market conditions and less red tape from municipalities eager for rental accommodation to meet high demand
In September 2018, there were 7,819 rental apartments under construction in the Vancouver CMA, or 7.2 per cent of all rental units. Given the demand, rents will continue increasing faster than inflation.
This table presents resale data and forecasts for the entire Vancouver CMA, which is a combination of submarkets from both the Real Estate Board of Greater Vancouver (REBGV) and the Fraser Valley Real Estate Board (FVREB). Previous editions of CMHC’s Housing Market Outlook covered the territory of REBGV only. Rental Market: Privately initiated rental apartment structures of three units and over. The forecasts (F) included in this document are based on information available as of 5th October 2018. (L) = Low end of range. (H) = High end of range. It is possible that the low end (L) and the high end (H) of forecast ranges for residential housing starts for singles and multiples jointly may not add up to the total. This is caused by rounding as well as the volatility of the data. Source: CMHC (Starts and Completions Survey – Market Absorption Survey – Rental Market Survey). Statistics Canada. CREA (MLS®). CMHC Forecast (2018-2020).
Source | REBGV
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