British Columbia home prices forecast to increase over next 3 years

The median resale price of a home in British Columbia is expected to increase at an accelerating rate over the next three years, according to a new forecast by Central 1 Credit Union.

The median resale price is expected to end this year at $388,000, up about 1.5 per cent following a decline in 2012, Central 1 says.

And while the credit union’s economist Bryan Yu expects that rate of increase to continue through 2014, he predicts bigger increases in the following two years.

“We have revised the provincial pricing outlook higher and expect prices to rise about 1.5 per cent in 2014, 2.5 per cent in 2015 and three per cent in 2016, taking the median price to $415,000,” Yu said in a news release issued this morning.

Central 1’s forecast calls for total home sales to be under 70,000 for 2013, but that should rise about seven per cent to 72,500 in 2014, and hit 84,000 in 2016.

“Although growth is significant, the sales level remains low when adjusted for the population base,” Yu said.

Yu said the volume of home sales will depend on population and economic growth, both forecast to expand at a subdued pace through most of 2014 before accelerating later in the forecast period..

He added that low mortgage rates will continue to support housing demand, but rising rates will eat into affordability.

Source: Vancouver Sun

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