Home prices forecast to rise in Metro region

The Metro Vancouver housing market will see higher sales and modest price increases over the next two years, according to a Canada Mortgage and Housing Corp. forecast.

The CMHC report, released Thursday, forecasts income and population growth will not only support a rebound, but also create a balanced housing market in Metro through 2020 and 2021.

“While inventories of homes for sale are expected to decline slightly as sales increase, a growing number of newly constructed homes coming onto the resale market will help keep market conditions balanced overall through the end of the forecast horizon,” the report says of the Metro region.

Mortgage qualification rules, also known as the B-20 stress test, will limit the borrowing capacity of some homebuyers, the CMHC report said, which will limit price growth. However, it also said greater discounts on mortgage interest rates will lend support to the housing market.

Home prices in Metro dropped 5.2 per cent in July, August and September, compared with the same three months in 2018, according to a Royal LePage survey.

CMHC predicts the average price of a home in Metro in 2020 will be between $983,000 and $889,000.

Townhouses and condos with prices under $700,000 in Metro Vancouver are expected to see the strongest demand, while the single-detached market is expected to remain soft, particularly with higher end, multi-million-dollar homes.