Real estate prices in Chilliwack are hitting all-time highs as residential listings are at an all-time low. (Greg Laychak/Black Press file)

High Chilliwack home prices, sales forecast to moderate

2018 sales should be lower than 2017 and 2016, which was the hottest year on record

As house prices rise and supply dwindles, a cooling may be on the horizon thanks to mortgage changes in the new year.

The B.C. Real Estate Association’s (BCREA) fourth quarter housing forecast calls for a drop in sales for 2018 in the Chilliwack and District Real Estate Board (CADREB) along with just a 4.3 per cent increase in price.

Provincewide, the BCREA forecast calls for an 8.8 per cent decrease in sales by the end of 2017 and a further 10.4 per cent drop in 2018.

• READ MORE: Chilliwack real estate sales and prices remain hot

For CADREB, the BCREA forecasts a 13.1 per cent drop in sales below the record 4,306 in 2016.

“Housing demand across the province will face increasing headwinds in 2018,” according to Cameron Muir, BCREA’s chief economist. “A rising interest rate environment combined with more stringent mortgage stress tests will reduce household purchasing power and erode housing affordability.”

Muir says the five-year qualifying rate is forecast to rise 20 basis points to 5.15 per cent by the end of 2018. Add that to an estimated 20 per cent decrease in purchasing power thanks to new qualification rules for conventional mortgages means the market should cool.

• RELATED: Chilliwack among top 10 B.C. cities to buy real estate

As for prices, the average price of a home in CADREB area — which includes Chilliwack, Agassiz, Harrison Hot Springs, Hope, Boston Bar and in between — was $397,911 in 2016.

The BCREA forecasts the average MLS price in CADREB to average $469,400 for the entire 2017 up 18 per cent, the highest increase of the 11 real estate boards in the province.

That compares to the average sale price last month locally of $484,753. With a BCREA forecast average sale price in 2018 of $489,900, that would require a stability in the local market unprecedented over the last decade.

Indeed, BCREA forecast just a 4.3 per cent price increase year-over-year, close to the B.C.-wide prediction of 4.6 per cent from $712,300 in 2017 to $745,300 for 2018.

And while the fewer sales for 2017 and 2018 are just that, fewer sales, these numbers will still be the second and third highest years on record.

What analysts will be paying particular attention to in 2018 is the much-needed increase in supply. Supply is at near decade lows, which, coupled with increasing demand has led to the rapid rise in home prices.

BCREA says the combination of new demand coming on line along with decreased consumer demand due to the new rules should make for a more balanced market in 2018.


@PeeJayAitch
paul.henderson@theprogress.com

Like us on Facebook and follow us on Twitter.

Just Posted

‘Gone are the days of leaving your vehicle and your house unlocked’

Agassiz RCMP tell residents to secure cars, homes during high crime season

It’s about to get hot: Special weather statement issued for Lower Mainland

Temperatures expected to rise and stick around till next week, Environment Canada forecasts

Highway crashes double in Fraser Valley, truck traffic also up steeply

Unclear if doubling of Fraser Valley highway crashes is linked to spike in truck traffic

Harrison labour dispute continues after Wednesday meeting

Village taking time to review workers’ offer

UPDATE: Picketing at Harrison festival ends

Negotiations between workers and Village scheduled for Wednesday afternoon

France doubles up Croatia 4-2 to win World Cup

Played in Moscow Russia, latest Fifa World Cup marks the highest scoring final since 1966

SilverStar officially opens Gondola

The brand-new gondola is now offering scenic rides for visitors on SilverStar Mountain Resort.

VIDEO: Man climbs crane in Abbotsford

Police, fire called to deal with climber last night

VIDEO: Langley City legendary water fight was a soaking good time

And perfectly timed for a hot weather warning

B.C. VIEWS: Making private health care illegal again

Adrian Dix battles to maintain Cuba-style medical monopoly

Almost every part of Canada’s largest national park deteriorating: federal study

Drawing on decades of research — the report lists 50 pages of citations

Activists protest outside Kinder Morgan terminal in kayaks, canoes

Tsleil-Waututh elder Ta’ah Amy George led the water ceremony from a traditional Coast Salish canoe

Canadian soccer fans brace for World Cup final between France, Croatia

First ever final for the Croatians, while it’s France’s third, going into match as betting favourite

B.C. Lions claw their way back to score 20-17 victory over Winnipeg Blue Bombers

The Bombers, who beat the Lions 41-19 last week in Edmonton, fell to 2-3 with the loss

Most Read