BC home prices expected to rise

The recovery of British Columbia's residential housing market has raised expectations that home prices will continue to increase, a survey has found.

Ipsos Reid reported on Monday that 52 per cent of survey respondents, buoyed by a slowly improving economic outlook and "positive momentum" in home sales, are optimistic that the value of their homes will increase over the next 12 months -- compared with 20 per cent who expressed that sentiment last January.

Respondents expect prices will climb an average 4.8 per cent across the province -- including 5.6 per cent in the Lower Mainland and 3.6 per cent in the rest of B.C.

"This represents a major shift in consumer sentiment towards B.C.'s housing market, exuding significant optimism as we move closer to 2010," the market research and polling company said in a news release.

Citing figures obtained for a coming report on the B.C. residential real estate market, Ipsos Reid noted that early this year there was an expectation that prices would decline three per cent over 12 months.

Ipsos Reid also found home buyers are more confident about buying a home -- 76 per cent said it's a good time to buy a home compared with 71 per cent in January.

Home prices have begun to increase in B.C. after dropping in 2008 amid an international economic meltdown, and both prices and sales volumes have moved off their 2008 lows.

Last week, Scotia Economics suggested in a report that a "seller's market" emerged this summer for the first time since September 2008.

"The buying environment is still good, but the selling environment has also improved," Ipsos Reid senior research manager Hanson Lok said.

"British Columbians still feel that it's a really good time to buy. For sellers, we've seen the housing price index creeping up over the past six months."

The bullish outlook on prices is tempered somewhat by the harmonized sales tax (HST) which comes into effect July 1, 2010.

"The sentiment is that there will be an impact upon home buyers -- 40 per cent believe they will be impacted. Almost half say they will wait and see how it affects the market," Lok said.

"There is a sense that when it comes to new homes there is going to be a little bit of resistance to buying a new home because of the new tax. More people will consider resale homes instead."

(prepared by Scott Simpson/Vancouver Sun)