Despite the uptick in sales from last year, the volume will remain below the peak levels seen between 2002 and 2007 said Bryan Yu, the reportâ€™s author and an economist for Central 1.
â€œLow but rising interest rates and tighter mortgage insurance rules will restrict sales for the next few years,â€ he said.
Population growth in Vancouver, according to the report, will remain positive but begin to slow, falling from 1.6% over the next two years to 1.4% in 2013.
Immigration is expected to continue to rise over this time period, but it wonâ€™t be enough to offset interprovincial movement, especially to Alberta, said the report.
The biggest price gains this year will be in the Lower Mainland/Southwest, said the report, with a 4% rise in the median price during 2011 after already coming off a 9% gain last year.
Over the next three years, Cariboo and the North Coast will both see consecutive steady increases in median price, said the report.
Yu said the posted five-year fixed-term mortgage rates will range from an average 5.4% in the first quarter to 5.9% by the end of this year.
In terms of sales, multi-family home sales are expected to lead growth over the forecast period, especially in Metro Vancouver and the Capital region.
â€œIn these regions, apartment condominiums comprise a more substantive component of the market, reflective of their relative affordability compared to single detached homes and proximity to transit hubs and amenities,â€ said the report.
By next year, there will be a renewed demand in recreational and retirement properties in the province as well, said the report.
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According to Central 1 Credit Union, home prices will set a new record in 2011, with the median rising 3% from last year to reach $402,000. Prices rose 6% between 2010 and 2011. The forecast said the median will also rise 1% in 2012, then 4% in 2013.