After a dizzying takeoff over the past year, the average prices of a house in Vancouver and throughout British Columbia, according to B.C. The Real Estate Association, will fall by as much as 8.7% next year. This conclusion, made in the latest quarterly report by the Housing Forecast Update, published on Tuesday by the British Columbia Real Estate Association, notes that for the first time in five years, an industry association of 20,000 provincial realtors predicts an annual decline in average Multiple Listing Service prices in Greater Vancouver and British Columbia. This new forecast predicts that MLS housing prices in Greater Vancouver will fall by 8.7% percent next year.
This means a decrease of 14.5%, taking into account the association’s previous forecast for 2017 the latest quarterly update published at the end of August predicted that MLS prices in Greater Vancouver will increase by 5.8% in 2017. The average forecast of prices in the province changed as follows: from an increase of 5.2 percent in 2017 (as expected in August) to a 6.4 percent decline in 2017 (in the latest forecast of Thursday). Cameron Muir, Chief Economist from B.C. The Real Estate Association (BCREA), said: “Prices for houses in Vancouver reached their peak in February of this year and then dropped, which was aggravated by some government measures, especially taxation for foreign buyers.” The demand for homes in 2017 will still be above average. Muir added: “It is assumed that the negative impact of the tax for foreign buyers has exhausted itself, and today data show that the percentage of foreign buyers is beginning to grow again.” “Average selling prices, which include various types of housing, suffer from a changing mix of” goods “in transactions,” said Muir, “Houses make up a smaller share of sales in Vancouver.” Previous BCREA reports are not available online, but Muir said that the last time the association predicted an annual decline in average prices in 2011, and in 2012, the quarterly report forecast decreases between about 1 and 3.5 percent.
BCREA representative Damian Statonikos did not respond to a request for access to forecasts for 2011 until the end of the term. Andrei Pavlov, a professor of finance at the Simon Fraser University’s Beedie School of Business, said that the 14.5 percent decline forecast is “a pretty significant improvement.” “We need to see the source,” said Pavlov, “This is basically an industrial group, and they have incentives to make the real estate market bright in color. Considering this, while they predict a decline, in my opinion, everything is much worse.” The BCREA forecast for this week predicts that next year sales will decline by 15.4 after two years of double-digit percentage growth. Tom Davidoff, an associate professor at UBC’s Sauder School of Business, said: “We have experienced such a huge jump that it would be natural to see a recession.” “If you go to the city center, you can see that sales volumes fall earlier than prices,” he said, “There has already been a huge decline in the volume and, so far, a moderate decline in prices, so it’s logical to assume, given the terrible decline in transactions, that prices will soon drop noticeably”