Multiple Listing Service® (MLS®) residential sales in
the province are on pace to reach 101,000 units this year, a decline of 10 per cent from a record 112,200 unit sales in 2016. Housing demand gained strength this spring, as some of the e ects of federal and provincial policy e orts to tamp it down dissipated. The shock to consumer con dence that followed the implementation of these measures, particularly the foreign buyer tax in Vancouver, has largely run its course. More importantly, strong economic and demographic fundamentals are underpinning an elevated level of transactions in BC.
The BC economy is expected to post its fourth consecutive year of 3 per cent or more real GDP growth in 2017. The cumulative e ect of such a long period of above-trend economic expansion is rising employment levels, robust consumer con dence and increased migration from other provinces. A er rising 3.1 per cent in 2016, employment in
the province is expected to increase a further 2.8 per cent
or 70,000 jobs this year. Consumer spending is also on an elevated path, with retail sales in the province expected to rise a further 5.7 per cent this year, a er an exceptional
7.4 per cent increase in 2016. BC’s economic performance hasn’t gone unnoticed. Net inter-provincial migration over the past three years has been the strongest in over two decades.
Strong housing demand across the province has not
been met with a commensurate increase in the number
of homes for sale. Total MLS® residential active listings reached a 20-year low this spring, and the resulting market imbalance is continuing to create upward pressure on home prices across most BC regions and product types. This condition is particularly acute in the Lower Mainland condominium market.
In the face of a lack of supply and tight market conditions, home builders have ramped up production. There are more than 40,000 units under construction in the province. However, most of the homes are condominiums, which take years to be completed and ready for occupancy. In
the meantime, homebuyers are o en forced to compete among each other for available units. While the average MLS® residential price in the province is expected to decline 1.1 per cent to $683,500 in this year, the decline is largely due to a shi in the mix and share of homes sold, and not representative of rising values of the typical home.