From bcrea.bc.ca

Multiple Listing Service® (MLS®) residential sales in theprovince are forecast to reach 100,900 units this year, adecline of 10 per cent from a record 112,200 unit sales in2016. MLS® residential sales are forecast to edge backnearly two per cent to 99,000 units in 2018. Housingdemand is expected to remain above the 10-year averageof approximately 85,000 units over the next two years.Strong economic growth and the associated increase inemployment are key drivers in the BC housing market. Agrowing population and demographics are also fuelingdemand in the province’s urban centres.

The BC economy has expanded at above trend growth forover three years. Indeed, 2017 is expected to be the fourthconsecutive year of 3 per cent or higher growth in theeconomy. The dollar volume of BC exports increased over 20per cent in the first half of the year, led by energy, mineralsand agriculture. The cumulative effect of a strong economyand rising employment levels has bolstered consumerconfidence. BC employment was up 3.9 per cent year-to-datein July, compared to the same period last year, an increase ofover 88,000 jobs. In addition, retail sales in the province areexpected to climb close to 8 per cent this year.

Population growth and demographics are also playinga key role in the housing market. BC’s strong economyand employment opportunities are attracting an influx ofmigrants from other provinces. Net inter-provincial migrationover the past three years has been the strongest in overtwo decades. In addition, the millennial generation arenow entering their household forming ages, which willcontinue to exert pressure on the rental market and onaffordable ownership supply.

Most BC regions are experiencing a limited supply of homes forsale, with market conditions favouring home sellers, especiallyin the Lower Mainland condominium market. This imbalance ispushing prices higher in the most affordable home types andwill lead to a drag on home sales if new supply isn’t sufficientto meet demand. However, strong housing demand and tightsupply hasn’t gone unnoticed by home builders. There arenearly 40,000 units under construction in Metro Vancouveralone, a 60 per cent increase from the previous peak in 2008.Once completed, market conditions are expected to reflectgreater balance between supply and demand and reducefurther erosion of affordability.