Bounce back from 2009 in the Vancouver Real Estate market will taper off in 2010
The huge bounce back in the Vancouver real estate market in 2009 which was fueled mostly by the record low interest rates will slow in 2010 and 2011 according to the B.C. Real Estate Association. Association chief economist Cameron Muir is forecasting provincewide sales in 2010 to increase only three per cent above a hot 2009's results to 90,100 sales in 2010, then slip back three per cent to 87,500 units in 2011.
The provincial average price, Muir is forecasting, will advance five per cent to $490,900 in 2010 then eke out just one-per-cent growth to $494,800 in 2011.
One of the largest factors that will slow the Vancouver Real Estate market is the affordability factor. As mortgage prices edge higher, coupled with the record prices, will keep further price increases under control.
And while B.C.'s economy is creeping towards a recovery with some job and income growth, Muir said the growth is not coming quickly enough to offset the rising unaffordability of housing.
"We're unlikely to see record sales levels this year and next as a result of that," Muir said.
However, Muir does expect B.C. home sales in 2010 and 2011 to remain slightly above the 10 year annual average, which is "what we would expect given the economy is just coming out of recession."
In his forecast, Muir estimates that the markets that roared back the most in 2009 - Metro Vancouver, the Fraser Valley and Victoria - will be among those with the most muted results in 2010 and 2011.
After rocketing back 44 per cent in 2009, Muir is projecting Metro Vancouver sales to advance just three per cent to 37,500 units in 2010, then slip back five per cent to 35,500 in 2011.
Muir is forecasting that the Metro Vancouver average price will jump seven per cent in 2010 to $636,000, then edge up just one per cent to $643,000 in 2011.
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