Housing market outlook upbeat despite ‘overvaluation’

CMHC projects continued real estate gains in Metro Vancouver

Bob Dugan




A new market outlook from the Canada Mortgage and Housing Corp. predicts higher real estate prices, housing starts and sales this year in the Lower Mainland, despite what it flags as “problematic price acceleration” near Vancouver.

“There is evidence that overvaluation is detected in the Vancouver housing market,” according to the CMHC report.

It forecasts the average MLS resale price across all home types in Metro Vancouver will continue to climb from $903,000 in 2015 to between $1.022 and 1.128 million in 2016 and to between $1.045 and 1.179 million in 2017.

The CMHC report said the gains could be at the lower end of that range if there’s easing of what it calls the imbalance between current elevated house prices and what’s supported by underlying fundamentals.

“Alternatively, in the absence of a shock to trigger this scenario, the province’s housing market would see levels of starts, sales and prices in the upper part of the wide ranges.”

The report said threats that could dampen the market include the growing number of highly indebted households that will be more vulnerable to job loss or a jump in interest rates, as well as a sharper-than-expected slowdown in economic growth in China, which would ripple through the Canadian economy.

RELATED: B.C. changes rules to stop real estate ‘shadow flipping’

Metro Vancouver home prices were up 26 per cent in the first quarter of 2016 compared to a year earlier.

The CMHC expects more listings over the next 18 months, as prospective sellers are attracted by the recent steep price jumps.

But it notes some sellers may be hesitant to list their homes if they’re unsure if they can find another home in the region. Others willing to relocate to another region will see it as an opportunity to cash in on high prices.

“Single detached homes, particularly in central locations, will continue to attract high net worth buyers, both local and offshore,” it predicts.

The price gains for detached houses have outpaced condos in Metro Vancouver. That’s been most noticeable in suburbs, where house prices have climbed at more than twice the rate of apartment condo prices, while the gap in outsized house gains has begun to narrow in Vancouver and West Van, where apartment price gains have lately been higher than houses.

Average rents in the region are forecast to climb by close to three per cent a year.

Just Posted

Money in to finish Lougheed Highway twinning

Feds announce $29 million to complete four laning of four-kilometre stretch in Maple Ridge

Campers expect 100 per cent online reservations at Golden Ears next season

Maple Ridge group has been fighting to keep drive in bookings

Maple Ridge council will be asked to declare climate emergency

Vancouver, London and Los Angeles have already done so

Pitt Meadows seeks partners in flood protection

$100 million in work needed to improve dike system

Maple Ridge senior facing homelessness at the end of the month

Jean Ticehurst can’t find affordable housing

Fashion Fridays: 5 casual summer dress styles

Kim XO, helps to keep you looking good on Fashion Fridays on the Black Press Media Network

Injured fawn at B.C. vet will be euthanized Friday night unless claimed by sanctuary

Gilbert the deer is currently being treated at West Kelowna’s Rose Valley Veterinary Hospital

BC Wildfire Service warns wet weather no reason to be complacent

Fire risk currently low for much of B.C. compared to same time over last two years.

Bank of Canada lowers qualifying rate used in mortgage stress tests

Home sales softened last year after the federal government introduced new stress test rules for uninsured mortgages

Couple found dead along northern B.C. highway in double homicide

Woman from the U.S. and man from Australia found dead near Liard Hot Springs

Trudeau says Ottawa open to proposals for B.C. refinery as gas prices soar

Prime minister says he knows B.C. residents are struggling and the federal government is open to ideas

Clock’s ticking to share how you feel about Daylight Saving Time in B.C.

Provincial public survey ends at 4 p.m. on Friday

B.C. man pleads guilty in snake venom death of toddler

Plea comes more than five years after the incident in North Vancouver

Most Read