After what is expected to be a weak 2019 overall, with sales down 1.8 per cent from 2018, residential resale transactions in B.C. are predicted to recover significantly in 2020, according to a November 6 B.C. Real Estate Association forecast.
MLS residential sales across the province are predicted to increase 10.9 per cent to 85,500 units in 2020, which would take the annual total to just below the 10-year annual average of 85,800 units.
“After a slow start to 2019, MLS home sales in B.C. have embarked on a sustained upward trend since the spring,” said Brendon Ogmundson, BCREA's chief economist.
“The dampening effects of federal mortgage rules mean that rather than a return to the heights of recent years, home sales are simply returning to trend after sustaining a significant shock.”
The BCREA said in its quarterly forecast report that it expected sales and listings to find balance in 2020 “as demand normalizes.”
However, the predicted sales increase is for all of B.C. and flattens out the widely varying predictions across different regions.
Most of the recovery in activity is forecast to be driven by rising sales in Greater Vancouver and the Fraser Valley, where the markets were hit hardest by the recent slowdown.
Greater Vancouver residential transactions are predicted to increase by 18.2 per cent in 2020, compared with 2019, and Fraser Valley sales are forecast to go up 12.4 per cent next year. In comparison, Victoria’s resale transactions are expected to rise a more modest four per cent in 2020.
Lower Mainland developers agreed that activity was returning to the local market and that sales were starting to recover from the recent hiatus.
Ian Renton, general manager of Auguston Town Development, said, "We are experiencing strong population growth in our Metro Vancouver cities and demand is prevalent. More specifically, our Fraser Valley area is experiencing strong employment growth and potential buyers are well informed on their market decisions. However, even with a significant amount of home construction, accessibility to the market and diverse housing types is still a live issue in areas such as Abbotsford."
Jason Wong, director of marketing and sales at Aragon Properties, added, "We are seeing more buyer confidence compared with last year. Buyers are very well informed and they take time making informed, value-based decisions... Nonetheless, we are witnessing a significant increase in activity in all of our newest projects across the Lower Mainland.”
However, the higher sales forecast in the Lower Mainland was not mirrored in BCREA’s price predictions. Greater Vancouver and the Fraser Valley are both expected to see an average MLS sale price rise of just one per cent in 2020, compared with an average sale price uplift of 3.6 per cent across the whole province.
The highest forecast for an average sale price increase is in the B.C. Northern region, which includes Prince George and Kitimat, where prices are expected to jump 8.1 per cent in 2020.
To read the full BCREA forecast report with regional breakdown for your area, click here.