A new report published by credit union Central 1 expects sales to continue at an elevated level although below previous forecasts due to the impact of government policy.
“The foreign buyer tax will result in a temporary but substantial short-term cut in Metro Vancouver sales trend of 10 per cent that extends into 2017,” Central 1 economist Bryan Yu said. “The tax puts further downward sales pressure on a market already slowing from spring fever. However, strength in the local economy will underpin sales and prices.”
Despite the easing of sales, Central 1 says prices are expected to continue rising with a provincial median $480,000 this year, up 12 per cent from 2015. Next year will see a 4 per cent increase with 3.5 per cent in 2018.
For Metro Vancouver the price rises will be in the range of 20 per cent for 2016 (to $705,000) followed by 4 per cent in 2017 and 4.4 per cent in 2018. Vancouver Island will see a particularly strong market.
“The housing market is driven by continuing low interest rates, the growing economy and population increases,” Yu said. “These fundamentals won’t change through 2018.”
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Vancouver is expected to see a short term easing of the housing market due to the foreign buyer tax but the outlook for the city and province is good.