The British Columbia Real Estate Association (BCREA) is predicting a ho-hum real estate market for 2012, without the kind of double-digit value gains high demand on parts of the Lower Mainland created last year.
“Modest economic growth at home and abroad is expected to limit growth in consumer demand both this year and in 2013,” said Cameron Muir, BCREA's chief economist, in the association's 2012 First Quarter Housing Forecast, release Friday.
More specifically, BC Multiple Listing Service residential sales are forecast to increase 2.1 per cent from 76,817 units in 2011 to 78,400 units this year, increasing a further 2.7 per cent to 80,500 units in 2013.
That's below the 15-year average of 79,000 units, and misses the record high, recordeding 2005 at 106,310 units, by more than 27,000.
The slowdown is largely owing to demand and not supply, say analysts, something that doesn't bode well for property investors looking to liquidate holdings and move up the property ladder.
There are some incentives for buyers, however.
"While European sovereign debt concerns and a sluggish U.S. economy will continue to impact consumer confidence, strong demand in the bond market is expected to keep mortgage interest rates at or near record lows for most of 2012,” added Muir.
Home prices in most B.C. markets are forecast to experience little change over the next 24 months as the supply of homes for sale more closely matches consumer demand, argues BCREA in the report.
But the average MLS residential price in the province is forecast to edge down 2.2 per cent to $548,500 this year and remain relatively unchanged in 2013, albeit increasing 0.8 per cent to $553,000.
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