2020 HOUSING OUTLOOK: STABLE AND BALANCED.
After a year that has seen prices fall by over 10%, a 30% reduction in new home sales, and a surplus of resale listings and new home inventory through the first two quarters, the last two quarters of 2019 saw a remarkable rebound.
2017 and the first half of 2018 saw the effect of one policy after the other introduced by municipal, Provincial, and Federal levels of government to "cool" the market, stem the double-digit gains in property values, and address affordability.
The situation reversed in the last two quarters of 2019. Sales recovered to levels equal to the ten-year average, and prices which had been off an average 10 percent, slowly crept upwards to being within 2018 values by three or four percent.
The reasons for the recovery? Buyers and sellers have adjusted to the new reality in price points, and sales volumes have returned as buyers perceive more value. Additionally, money remains accessible with little or no change in the prime rate and mortgage rates.
The Federal B20 mortgage Stress test is still a factor in terms of a negative effect on the market, but buyers have had a year to increase savings and wages to offset the erosion of buying power.
Confidence also returned to the market as buyers perceive prices bottoming out with well-priced homes now selling. The luxury market, which had seen price drops of thirty to forty percent, has also stabilized, as realistic price points prevail with fewer buyers, particularly from offshore.
Overall, the description of current conditions can be labelled as balanced, and at "near normal" levels, and this is being projected forward to predict conditions in 2020 through 2021.
Projected housing starts will continue to climb, in line with modest increases in economic activity and incomes but will stay within the range of the ten-year average. Sales will continue to strengthen and recover the declines that have prevailed since 2016 and are expected to fully recover by the end of 2021, based on increases in household disposable income.
Price growth is expected at a moderate pace through 2020 and 2021 such that the average price will meet or exceed 2017 levels by the end of 2021, with growth in household income, a supportive rate of household formation, and favourable economic and demographic conditions in here in BC.
All of these factors point to a stable and effectively "balanced' market for the next 12 - 24 months where measured growth in starts and sales volume, low and stable interest rates, and a modest rate of price increases leaves neither buyer nor seller with any distinct advantage, making this a favourable time to consider buying a home.
HAVAN will continue to monitor the market and those factors that influence it. We will continue to lobby for consumer relief in the B20 stress test, and to find the means to increase housing supply in order to keep prices steady and or expanding at a moderate pace.
A FRIENDLY REMINDER
Thank you everyone for your support this year of HAVAN, the staff and myself as we navigated through a busy year. Member support helped your association bring the industry's issues to the forefront with many successes now under our belt. But there is always more to do.
By now, many of you have received your renewal invoice for membership fees. We kindly ask that you take a moment to recognize the value of connections, and being 'top of mind' with industry, government and homeowners. Your support of HAVAN is greatly appreciated and your prompt payment of fees goes a long way to support our efforts. If, for any reason, you are experiencing any challenges, please speak with Renée (Renee@havan.ca) or Carolyn (Carolyn@havan.ca). They will be pleased to help.
GREEN SHEET: PROJECTS ON THE GO!
HAVAN member Green Sheet Construction Data tracks the Metro Vancouver construction market. Their online searchable database provides clients with a powerful tool to see past, current and future construction projects across the Lower Mainland. Visit
Green Sheet Hot Tips
to view this month's featured projects.
LAST MINUTE OPPORTUNITY: INTERNATIONAL BUILDERS' SHOW
Exhibit with the Official Canadian Pavilion at the International Builders' Show (IBS) January 21 - 23, in Las Vegas with the Canadian Pavilion.
IBS is the world's largest annual residential/light commercial construction trade show. Because the US and Canada share the same "2x4" construction methods, employ similar building codes, and are right next to each other geographically, the US is by far the most important export market for Canadian building products. Canada is the No.1 foreign supplier to the US building materials market, and the US is Canada's biggest customer.
The Official Canadian Pavilion has limited space available (500 sq ft). Financial Assistance to defray some of the costs regarding participation in the Canadian Pavilion at IBS 2020 is available. Space available on a first come basis. Booking Information.
