British Columbia Housing Market Outlook 2013
Housing starts are forecast to rise modestly in 2013 as the economy and job growth improve relative to the 2012 outlook. As a result, total housing starts are expected to reach 29,100 units in 2013, up slightly from a projected 28,500 units in 2012.
Buyers’ market conditions in the existing home market emerged in mid-2012 and are expected to continue into early 2013. However, balanced markets are expected to return by mid-2013.
Economic growth is forecast to be slightly stronger in 2013 than in 2012, reflecting increased nonresidential investment and consumer spending partly offset by a weaker global outlook. Domestic factors in British Columbia, including population growth and continued low mortgage interest rates, remain supportive of the housing market. Labour market developments also point to a pickup in housing demand in 2013. In the first eight months of 2012, job growth in British Columbia was second only to Alberta. Job gains were concentrated in full-time employment, which was up 3.2 per cent compared to the first eight months of 2011.
Population growth due to individuals moving to the province from other countries is a key source of housing demand. Net migration is forecast to increase in 2013, consistent with GDP and employment growth that is expected to be above the national average. This will add to housing demand, particularly in Vancouver.
Single Starts: Single-detached home starts are expected to rise to 9,400 units in 2013 from an expected level of 8,500 in 2012.
Multiple Starts: The level of multiple housing starts, including apartments, semi-detached and row homes is forecast to edge lower in the final quarter of 2012 and first quarter of 2013, before stabilizing over the remainder of the forecast period. For 2012 as a whole, multiple starts are forecast to rise to 20,000 units then fall slightly in 2013 to 19,700 units.
Resales: Existing MLS® home sales are forecast to increase in 2013 to 77,700 sales following a projected 8.8 per cent annual decline in 2012 to 70,000 sales. The number of resale transactions is forecast to increase in 2013, in line with strengthening employment and population growth.
Sales are expected to continue to shift to more modestly priced homes, including apartment condominiums. Provincial resale markets are forecast to move from buyers’ to balanced conditions by mid-2013, although local housing market conditions will vary.
Prices: The average annual existing MLS® home price, is expected to register a decline in 2012 and a slight decline in 2013. This is expected to reflect compositional shifts in sales, as condominiums are expected to comprise a larger share of existing home sales over the forecast horizon. In the larger urban centres, the trend of fewer luxury home sales and an increase in sales of more modestly priced homes is expected to continue. As well, the higher-priced Vancouver home market is forecast to make up a smaller share of provincial home sales in 2013. In 2012, average existing home prices are forecast to be $517,400. Prices in 2013 will remain relatively stable at $515,000 as resale activity picks up.
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