Vancouver, BC – March 9, 2018.

The British Columbia Real Estate Association (BCREA) released its 2017 Fourth Quarter Housing Forecast today.



Multiple Listing Service® (MLS®) residential sales in the province are forecast to decline 8.6 per cent to 94,855 units in 2018, after decreasing 7.5 per cent in 2017.


A record 112,209 unit sales were recorded in 2016. The ten-year average for MLS® residential sales in BC is 84,800 units. Strong employment growth, consumer confidence and favourable demographics have been highly supportive of housing demand over the last four years.


However, slower economic growth, tougher mortgage qualification rules, and a rising interest rate environment are expected to slow the pace of housing demand over the next two years.


“Housing demand in the province is expected to moderate this year and in 2019,” said Cameron Muir, BCREA Chief Economist. “More stringent mortgage qualifications and rising interest rates will further erode affordability and household purchasing power.”

The 5-year qualifying rate is forecast to rise 35 basis points to 5.49 per cent by Q4 2018, and another 21 basis points to 5.70 per cent by Q4 2019. “With home prices already at an elevated level, BC households are more vulnerable to rising interest rates.”

The supply of homes for sale continues to trend at or near decade lows in most BC regions. However, this condition hasn’t gone unnoticed by home builders. There are over 60,000 homes now under construction in the province, well above the previous peak of 45,000 units recorded in 2008. In Metro Vancouver, over 42,000 units are in the pipeline, 56 per cent more than recorded in 2008. Slowing consumer demand combined with a surge in new home completions over the next several quarters will create more balance in the housing market and produce less upward pressure on home prices. The average MLS® residential price in the province is forecast to increase 6.0 per cent to $752,000 this year, and a further 4.0 per cent to $781,800 in 2019.

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Courtesy BCREA

March 8, 2018


In BC, total housing starts fell 26 per cent monthly basis to 30,622 units SAAR with both single and multiple unit starts posting monthly declines of over 20 per cent. On a year-over-year basis, total starts in the province were 9 per cent higher. 

Looking at census metropolitan areas (CMA) in BC: 

  • Total starts in the Vancouver CMA were down 37 per cent on a monthly basis at 20,000 units SAAR but were 12 per cent higher compared to February of last year.  Construction activity is particularly strong in the condo markets of Burnaby, the North Shore and the city of Vancouver.
  • In the Victoria CMA, housing starts nearly tripled on a monthly basis to an annualized rate of almost 4,000 units due to a number of multiple unit projects breaking ground. Total starts in the Victoria CMA were up 48 per cent year-over-year. Construction activity is being driven by new apartment rentals and condos.
  • The Kelowna CMA saw housing starts decline over 60 per cent on a monthly basis in February with relatively little new construction occurring in the month. The CMHC counted just 22 single units and 15 multiple unit starts.

Housing starts in the Abbotsford-Mission CMA  increased 200 per cent year-over-year as construction of more than 300 new multiple units got underway in February.  However, the annualized pace of starts fell 6 per cent from January at just under 800 units SAAR

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BCREA ECONOMICS NOW


Bank of Canada Interest Rate Announcement  - March 7, 2018

The Bank of Canada opted to maintain its target for the overnight interest rate this morning at 1.25 per cent.  In the statement accompanying the decision, the Bank noted that although growth in the Canadian economy slowed more than expected in the fourth quarter of 2017, the economy is expected to operate at capacity going forward. The bank cited recent trade policy developments, mainly the threat of a trade war with the United States, as a significant risk to its outlook for growth and inflation.

The Canadian economy is at or very close to full-employment, meaning there is little room for Canadian firms to expand output without putting undue pressure on inflation. There are signs core inflation is already firming up. Two of the Bank’s three core inflation measures are closing in on the Bank’s 2 per cent target and all three measures have increased significantly in the past six months. Absent any unforeseen challenges to the Canadian economy, monetary policy will be biased in the direction of higher interest rates.  However, the Bank will likely hold off raising its overnight rate while it assesses the impact of tighter monetary policy over the past year, the impact of newly implemented B-20 guidelines on mortgage qualification rules, and heightened risk to Canadian exports from US trade policy

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The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.