2012 will most likely be a continued rebounding year for the British Columbia real estate market. Outside of the Vancouver Metro area, expect the real estate market growth to remain slow, but steady and stable.
Overall, British Columbia is expected to see a higher than average growth in housing starts, estimated by the CMHC to be a 7.1% increase for 2012. Housing starts in British Columbia are projected by the CMHC to be roughly 24,000 on the low side with a high forecast of 28,000. Of these, 60% of the new starts are forecast to be multiple units. As with most of Canada, mortgage rates remain low in the British Columbia region, making financing attractive for purchasers. Mortgage rates remain close to 3.5% for a 1 year closed term and below 5.5% for a 5 year closed term. Rates are not expected to increase substantially over the next 12 months.
The bulk of new housing starts in British Columbia are expected to be in the Vancouver area, both in single detached homes and multi family housing. After seeing a substantial increase in sales prices from 2010, the average MLS price in Vancouver is expected to exceed $800,000 for 2012. The average unit price remains well over the average home price in British Columbia as a whole, and about double of the nationwide average. The price change is estimated to be less than a 3% increase. But with the stability of prices and good financing terms, resale transactions are predicted to increase by nearly 9%.
One area showing substantial growth is the Surrey area. For the 2nd year, the Real Estate Investment Network of Canada determined Surrey the best real estate investment city in Canada for residential real estate. It also rated Surrey the fourth best overall city in Canada for real estate investment in general. This was based on average household income, transportation capacity, job outlook, population, and other factors.
The Victoria Metro area is forecast to show an increase in sales and a modest jump in prices, after a 3 year decline in both areas. New construction in the Victoria area is expected to jump 10% in single homes and 8.1% in multi family housing. After 3 years of declining prices and housing starts, even a slight increase is welcome for the area.
Prince George and Nanaimo are expected to show a slight increase in sales and prices, while Abbotsford is expected to show a decrease in price and a small decrease in sales. Both the Kamloops area and the Kelowna areas are expected to have double digit increases in sales for 2012, with modest price increases.
As the 2 major British Columbia markets will continue to grow, the smaller markets will remain at a stable and slower growth rate. With stable prices and low financing, a potential buyer shouldn’t hesitate to take advantage of market conditions in the British Columbia province.