Multiple Listing Service® (MLS®) residential sales in the province are expected to edge back 6.3 per cent to 96,100 units in 2016. Home sales surpassed the 100,000 unit threshold for only the third time on record last year, as strong market fundamentals and elevated consumer confidence charged demand. While fewer home sales are expected this year, economic conditions remain robust and will support relatively high levels of housing demand. Strengthening economic conditions at home and abroad are expected to bolster housing consumption activity in 2017. BC MLS® residential sales are forecast to increase 2 per cent to 98,000 units next year.
The BC economy is proving resilient to the collapse in oil prices and weak commodity demand. Consumer spending through retail sales is growing at its fastest rate in a decade, while employment in the province increased by over 2 per cent during the latter half of 2015, with a marked increase in full-time jobs. Tighter labour market conditions have also led to a 4 per cent rise in average wages. While BC exports have yet to fully realize the competitive advantage of the lower dollar, tourism has experienced significant gains. A record level of overnight visitors came to Vancouver over the last 12 months. Finally, interprovincial migration to BC is on an upswing, with waning job opportunities in Alberta driving workers from the province.
Market conditions are not consistent around the province. Regional economies with a heavy reliance on commodities have demonstrated weaker housing market conditions, while larger urban areas have experienced declining inventories and strong sellers’ market conditions. Indeed, Vancouver and the Fraser Valley are exhibiting accelerating market conditions. However, a marked increase in new construction activity, now at its highest level since 2008, and an increase in new listings during the spring market are expected to ease some of the upward pressure on home prices. After rising 12 per cent in 2015, the average MLS® residential price in the province is forecast to increase 6.4 per cent to $677,200 this year and a further 4.2 per cent to $705,300 in 2017.