Further home price dips forecast in 2013 for Lower Mainland
Greater Vancouver's average home prices should drop nearly two per cent next year after falling 5.9 per cent in 2012, according to a new housing forecast from the B.C. Real Estate Association.
The weakness in the real estate market is projected to be softest in single detached houses next year, with a 2.7 per cent drop to $1.09 million in the average price paid in Greater Vancouver in 2013.
Attached homes are projected to decline 0.7 per cent in average price to $555,000, while condos would gain 0.3 per cent to $443,000.
The BCREA report cautions those average prices were skewed up in 2011 by a spate of high-end home sales in the Vancouver area.
More typical homes in the region didn't run up as fast as the average, nor have they slipped as much since the peak, it said, adding most home prices should remain "essentially flat" through 2013.
Sales are expected to rebound by almost 14 per cent after falling by an estimated 20 per cent in 2012.
Demand from buyers has ebbed since the federal government imposed tighter mortgage qualification rules.
Those measures, aimed to curb rising levels of consumer debt, were equivalent to a one per cent jump in mortgage rates for first-time buyers, according to economists at the BCREA.
"Market fundamentals suggest stronger sales activity ahead," the BCREA report says in its Greater Vancouver outlook.
"Full-time employment has been growing at a three to four per cent clip for several months, mortgage interest rates remain at or near historic lows and the population base continues to expand."
It says that should mean a return to "more balanced" real estate market conditions in Metro Vancouver as the current buyer's market moderates.
Multi-family buildings are expected to account for 80 per cent of new units built this year, while single-family house starts are forecast to drop below 8,000 units for the first time since 2009.
The province's economy is projected to grow at a rate of 2.3 per cent next year and the unemployment rate is to slip below seven per cent.
In the Fraser Valley real estate zone, which includes Surrey, White Rock and North Delta, the forecast calls for a 0.3 per cent drop in detached house prices to an average $600,000 in 2013, a 0.7 per cent drop in attached homes to $333,500 and a 1.4 per cent gain in apartments to $225,000.
It estimates overall average residential prices in the Fraser Valley will have fallen 3.1 per cent by the end of this year.
The report cautions that fluctuation mainly reflects changes in the mix of homes selling and that typical homes, tracked through benchmark prices, have shown "only modest change" since the end of 2009.
Sales are expected to rise 5.7 per cent next year after a more than 10 per cent drop in 2012.