Pent up demand will drive BC home sales in 2020

As we approach the halfway point of 2019, analysts are applying some 2020 vision to their forecasts.

For the British Columbia housing market, which has been dogged by lower sales over the past year, there appears to be better times ahead according to the province’s real estate association.

While sales for 2019 are expected to decline 9% year-over-year to 71,400 units, the British Columbia Real Estate Association is forecasting a 14% jump to 81,700 in 2020.

That would move the year’s sales total closer to the 10-year average of 84,300 units.

“The shock to affordability from restrictive mortgage policies, especially the B20 stress test, will continue to limit housing demand in the province this year,” said Cameron Muir, BCREA Chief Economist. “However, a relatively strong economy and favourable demographics are likely creating pent-up demand in the housing market.”

The market is more balanced now although some parts of the province are a buyers’ market.

Prices to gain in 2020

Current market conditions are expected to provide little upward pressure on home prices this year, with the average annual residential price forecast to slip 2% to $697,000.

Modest improvement in consumer demand is expected to unfold though 2020, pushing the average residential price up 4% to $726,000.