CANADIAN HOUSING MARKET FORECAST UPDATE

(October 14, 2017 )

OCTOBER 2017

British Columbia
We project home resales to decline by 8.0% to 93,100 units
and prices to rise by only 1.5% next year. Our view is that the BC market will be particularly sensitive to higher borrowing rates, as they will take a further toll on already strained housing affordability in markets such as Vancouver and Victoria.
Policy measures:
including a 15% tax on purchases by foreign nationals in Metro
Vancouver, implemented last year contributed to cool activity markedly in the province in 2017. We forecast that these factors will cause home resales to fall by 9.8% this year.
Yet demand supply conditions remain surprisingly tight in the
province at this stage. That’s because policy measures also prompted many would be sellers to hold off listing their properties for sale earlier this year. Nonetheless, we expect gradual erosion in those market conditions, which will temper price increases next year.

Source: John & Debbie Hebel, Mortgage & Builder Specialists, RBC Royal Bank