B.C.’s hot real estate market is expected to continue to slow over the next two years, according to new figures from the Canadian Mortgage and Housing Corporation.
House prices in the province, especially in Metro Vancouver, are set to level out in line with salaries, jobs and population growth, the Crown corporation said Tuesday.
New construction is also expected to slow down to match lower demand, with condo starts barely hitting 25,000 a year in B.C., down from 31,318 new condo starts last year.
“Shifting market conditions across B.C.’s large urban centres is resulting in movement back towards balanced or even buyers’ market conditions in some cases, which is beginning to flatten price growth or, in some areas, result in price declines,” the corporation’s report noted.
Adil Dinani, a Coquitlam-based realtor with Royal LePage, said the slow shift towards a buyers’ market was a mix of government policy and natural market cycles.
“If you look at the past decade since 2009, when we came out of the heights of the recession, we’ve been the beneficiaries of a very strong real estate market,” said Dinani.
“We’re at a point where adjustment and moderation like we’re experiencing now is normal and natural.”
Dinani pointed to the provincial NDP, who came to power last summer on promises to cool Metro Vancouver’s housing market.
“They’ve bumped up the tax to foreign buyers, they’ve introduced the speculation tax,” said Dinani.
Mayoral elections across the province, particularly with mostly newcomers taking the reigns in Metro Vancouver, could also see a shift in municipal housing policy.
Dinani cited Kennedy Stewart’s promises to put forward stricter measures to get a grip on that city’s housing woes.
But despite the slowdown, Dinani doesn’t think recent buyers should be worried.
“If we look at history… every [recent] dip was very short lived, usually six to nine months,” he said.
“I believe if you buy real estate today and have a longterm time horizon, it will be a fruitful investment.”
Dinani acknowledged the Bank of Canada’s recent interest rate hike could affect that, but said that the shift to a buyers’ market was probably healthy overall.
“If you were looking to buy a condo in the first quarter of 2018, you were competing sometimes against 10-12 offers,” he said.
“Now, you can probably approach that same property being the only offer on the table and… probably negotiating off the price a little bit instead of feeling like your back is off the wall.”