The frenzied housing market of the past few years seems to have largely cooled, and now a group of property analysts are predicting it will keep doing so.
Average Metro Vancouver house prices are expected to rise a median of 1.8 per cent this year, less than half the predicted 5.5 per cent in a previous forecast, according to a small, focused Reuters poll of 16 property analysts.
The region’s median forecast for next year is a price rise of 1.7 per cent rise, down from the previously predicted 3.4 per cent. That predicted increase is less than inflation, now pegged at 2.5 per cent.
When asked to rate housing affordability on a scale of one to 10, where 10 is extremely expensive, analysts put the Canadian market at six, Toronto at eight and Vancouver at nine. That was unchanged from the previous survey in June.
Sebastien Lavoie, chief economist at Laurentian Bank, said, “In Vancouver, the market takes a longer time to find a new equilibrium path due to the intended measures from the [provincial] government to ease overheating pressures. So far, the plan is working well.”
The national house prices will rise by a median 1.7 per cent in 2018, according to the analysts, which is less than the 1.9 per cent forecast in June. Home prices are set to rise another 2.1 per cent next year, and another two per cent in 2020, they predicted.
“We are going to see very modest price growth across all markets,” said Robert Kavcic, senior economist at BMO Capital Markets in Toronto. “We are seeing Toronto and Vancouver still adjusting to past policy measures and Bank of Canada rate hikes.”