Year-to-date, BC residential sales dollar volume increased 16.8 per cent to $38 billion, compared to the same period last year. Residential unit sales increased 3.5 per cent to 66,922 units, while the average MLS® residential price rose 12.9 per cent to $566,925 over the same period.

Housing Forecast Points to Market Stability in 2012
BCREA 2011 Fourth Quarter Housing Forecast

Vancouver, BC – November 8, 2011.The British Columbia Real Estate Association (BCREA) released its 2011 Fourth Quarter Housing Forecast today.

BC Multiple Listing Service® (MLS®) residential sales are forecast to rise 3.2 per cent from 74,640 units in 2010 to 77,000 units this year, increasing a further 3.9 per cent to 80,000 units in 2012.

“Low mortgage interest rates are expected to persist through 2012 keeping affordability on an even keel,” said Cameron Muir, BCREA Chief Economist. “However, headwinds on the economic front will constrain consumer demand over the next year to below the ten-year average of 87,600 units.” A record 106,300 MLS® residential sales were recorded in 2005.  

Lack of HST transitional rules, not a bubble, is affecting real estate. - Nov 3, 2011

L-R: Richard Wozny, Site Economics Ltd.; David Podmore, Concert Properties Ltd.; Eugen Klein, President-Elect REBGV; Ward McAllister, Ledingham McAllister Properties.

There is no real estate bubble in Vancouver but, according to a panel of speakers at a recent Board of Trade event, a lack of clear transitional rules leading up to the return of the provincial sales tax is having a negative effect on the real estate industry.

That was the message delivered by the panel of three real estate industry experts, including the Board’ President-Elect Eugen Klein, to a packed house at the Board of Trade’s Bubble Trouble event on October 21 at the Fairmont Hotel in Vancouver.

Other panelists included Ward McAllister, president of Ledingham McAllister Properties, and Richard Wozny, of Site Economics Ltd. The panel was moderated by David Podmore, CEO of Concert Properties Ltd.

Each of the speakers presented information that helped to set the overall picture of what they consider to be a solid overall market that is not in the midst of a bubble. But they directed their strongest comments towards the impact that the lack of transitional rules is having on the market right now.

McAllister was the most vocal in his criticisms, noting that he and his company have been “literally begging” the provincial government for transitional rules since the results of the referendum to repeal the HST were announced.“Potential buyers, especially the under-25 group, are sitting on the sidelines,” said Klein. “It’s also affecting home renovation projects with HST on them because consumers don’t know what to do.”

“What is amazing to me is that it took the government three days to bring this new tax in and now they are telling us it is going to take up to 18 months to unravel,” said McAllister. “This is really hurting us in the new home business just because of the uncertainty.”

Both Klein and McAllister noted that they are seeing developers taking on a portion, or even all, of the HST on their product to try and remove that uncertainty for potential buyers.

Other information provided by the speakers suggested that the Metro Vancouver real estate market is healthy and stable.

Wozny forecasted that low interest rates will hold steady into the foreseeable future, which will translate into continuing sales, and McAllister highlighted immigration data that shows that approximately 52,700 immigrants will move to British Columbia in 2011. Of that total, some 42,000 will move into the Metro Vancouver area, meaning that the need for new housing will remain strong.

Klein pointed to steady residential sales driven by high-end property demand in Richmond, West Vancouver and the Westside of Vancouver. He also updated major commercial projects that will add approximately five million square feet of retail space and 1.5 million square feet of office space to Metro Vancouver by 2015.

“Putting the residential and commercial real estate sectors in perspective, the Lower Mainland remains a very desirable place to live and work,” said Klein.

BCREA ECONOMICS NOW