BC’s housing market forecast doesn’t look too bad, says CMHC

Canada Mortgage and Housing Corporation is forecasting a stable housing market for British Columbia with light upticks in sales numbers, average prices and housing starts in 2013.

“Factors in 2013 driving the housing market are expected to be a little bit stronger,” Carol Frketich, B.C. regional economist for CMHC said. “There is expected to be a bit of a pick up in job growth next year, economic growth and demographic growth as well.”

Housing starts will increase to 28,500 homes for this year in B.C., from 26,400 starts in 2011, and then rise to 30,100 homes in 2013, CMHC said.

Most of the growth in housing starts for 2012 has been in multiple-family housing, but in 2013, multiple-family housing starts will level off, while single-detached homes start to rise, Frketich said.

“We tend to see more single-detached home starts when resale market conditions are stronger, so that’s why we’ve got that stable level of single-detached this year,” Frketich said. People who are looking to buy can find homes on the resale market.”

She said CMHC expects 9,900 single-detached housing starts in 2013, up from 8,900 this year. That compares to 11,500 in 2010.

Average prices, which are down about five per cent in Vancouver this year from last year, are expected to climb about 2.6 per cent by 2013, both in Vancouver and across B.C., Frketich said.

The average MLS price in B.C. is forecast to be $522,200 for 2012, down 7 per cent from 2011, but should increase to $537,700 as resale activity picks up next year, CMHC forecast. The resale market in B.C. will maintain balanced supply and demand conditions through 2013, CMHC said. The number of sales will continue to moderate through 2012, but should also pick up in 2013, Frketich said.

Vancouver renters will be looking at lower vacancy rates and higher rents for the fall, Frketich said. The vacancy rate is projected to fall to 1.1 per cent in October from 1.4 per cent in October 2011, while the average rent for a one-bedroom apartment will climb to $1,005 from $964 in the same time period.

Nationally, the CMHC is forecasting a moderate slowdown in new-home construction starts as well as sales of existing houses.

The CMHC national forecast suggests next year will be somewhat softer than estimates the federal agency issued in June, while 2012 may be somewhat stronger nationally than previously expected.

Nationally, CMHC estimates there will be between 196,800 and 217,000 units of housing started in 2012. In 2013, CMHC now estimates national housing starts will be in the range of 173,000 to 207,400 units.

The national average price for property sales through CREA members is forecast to be between $351,300 and $378,400 in 2012 and between $358,000 and $395,800 in 2013, CMHC said Tuesday.

Source: Tracy Sherlock, Vancouver Sun

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