Central 1 Credit Union recently released a new forecast which predicts that British Columbia’s red-hot real estate market may remain “robust” through 2018, despite fears that the new foreign buyer tax is cooling down sales in Metro Vancouver. Overseers of the market also claim that the trend will benefit other areas of B.C.’s real estate market while the province’s sellers remain in a rather strong position.
Bryan Yu, a senior economist for the organization, claims that the new 15% tax may temporarily slow sales in the area by about ten-percent. “The foreign buyer tax will result in a temporary but substantial short-term cut in the Metro Vancouver sales trend…the tax puts further downward sales pressure on a market already slowing from spring fever,” he said.
Here are some predictions from the new forecast:
- The median annual price in B.C. will rise about 12% to $480,000 in 2016.
- The median annual price in B.C. will also increase by about 4% in 2017 and 3.5% in 2018.
- The median annual price in Metro Vancouver – which has already increased nearly 20% to $705,000 – will increase by 4% in 2017 and 4.4% in 2018.
- Growth in housing sales will shift toward Central Okanagan and Vancouver Island in 2017, but shift back to Greater Vancouver in 2018.
B.C.’s Ministry of Finance also provided a statement on Central 1’s findings:
“It’s too soon to conclude how the real estate market has responded to the additional tax. … As time goes on, we will have a better sense of how the market responds to the additional tax and to assess the effect of the tax. The intent is to slow the rate of price growth and cool demand while Metro Vancouver’s housing market responds by building new homes to meet local needs.”