Greater Vancouver home prices to climb 5% in 2018: Royal LePage forecast
Low supply continues to put upward pressure on home prices across Greater Vancouver, but price growth will be limited as new stricter federal rules that will make it more difficult for many Canadians to get mortgages come into place January 1.
According to a Royal LePage forecast released December 13, home prices will increase across the region are expected to increase 5.2% next year overall, bringing the average sales price to $1,353,924.
“We are watching how the new OSFI stress test will impact the Greater Vancouver market,” said Royal LePage Sterling Realty general manager Randy Ryalls. “Low inventory will continue to put upward pressure on prices.
“However, with the introduction of the stress test, as well as other factors such as potential interest rate hikes, price growth will likely be limited to mid-single digits.”
One factor putting a strain on supply next year, according to the forecast, will be homeowners’ hesitation to put properties on the market for fear they won’t be able to find another property to buy, or because they might not qualify for financing under the stricter rules. This will be a particular constraint on entry-level properties.
Nationwide, Royal LePage anticipates prices to increase 4.9% in 2018, to an average of $661,919.
Royal LePage president Phil Soper said it is important that policy makers introduce measures to help protect the market from “runaway price inflation,” but ultimately, supply and demand will always win.
“Attempting to use public policy to steer property prices in huge, rapidly growing cities like Toronto and Vancouver is like a tugboat trying to turn an ocean liner,” he said. “Consistent, measured policy can have a positive impact.
“Just don’t try to turn the market on a dime or you risk losing the ship.”
Information obtained from biv.com and Emma Crawford Hampel.