Residential real estate sales, prices to follow 2022 trend: REBGV forecast
Sales activity in the region is expected to remain flat, while prices will increase slightly
British Columbians hoping for a housing market unlike 2022 will be disappointed, according to a new regional forecast.
According to the Real Estate Board of Greater Vancouver’s (REBGV) housing market forecast, sales and prices this year are expected to remain relatively similar to last year.
The prediction, which will “raise most eyebrows,” is a slight price hike across all property types to an average home price of $1.2 million in 2023 — a 1.4 percent increase from 2022, Andrew Lis said, Director of Economics and Data Analysis at REBGV.
Lis said the expected change is a “flat projection” rather than an increase.
“Our market data still shows very low inventories. There just aren’t many products that are on sale at the end of the month,” he said. “There’s this opposing dynamic where you have a sustained inventory decline, but [the region] The population continues to increase and at the end of the day we see that is a floor for prices.”
To show the stark difference in supply today compared to historical developments, Lis said that in the early 1990s the region tended to have around 18,000 units for sale at the end of a month. Today, the trend is around 8,000 units for sale, despite population growth and sustained housing demand.
Apartment sales across Metro Vancouver for all apartment types are expected to land at about 28,500 in 2023, down 2.6 percent from 2022’s 29,261 sales, according to the REBGV forecast.
Rapid rate hikes that have led to higher mortgage payments “keep selling in check,” Lis said, noting the low level of buying and selling activity.
“That’s what the forecast informs because the Bank of Canada has signaled it will continue pausing rate hikes unless there is any economic data to suggest they need to go further. Assuming they pause or don’t move up too much further from where they are now, it’s very likely that overall market activity will look very similar to 2022,” he said.
Another factor that could impact the market is the immigration targets set by the federal government between 2023 and 2025. Lis predicts that this will fuel some activity on the buy-side of the housing market, as well as demand for rental housing.
Risks to REBGV’s forecast include the risk of recession, economic stagnation and higher mortgage rates, according to the report.