Grim forecast for housing

Don't let it bring you down -- it's only more grim news about B.C.'s housing market.

Not only will B.C. post Canada's largest drop in resale house prices this year, it will be one of only two provinces to see a decline next year, Canada Mortgage and Housing Corp. said yesterday.

And not only will B.C. see Canada's biggest fall in housing starts in 2009, it will again be one of only two provinces to see a drop next year, CMHC added in a market outlook.

B.C. resale prices will tumble 10.3 per cent this year to $407,700, with another 0.6-per-cent decline to $405,400 next year, CMHC said. Ontario will be the province's sole partner in decline in 2010, with a one-per-cent drop, it said.

Starts in B.C. will plunge 33.6 per cent to 22,800 in 2009 and drop 9.2 per cent next year. Quebec, the only other province to see fewer starts next year, will post a drop of 0.5 per cent, CMHC said.

CMHC's outlook foresees a silver lining, as have earlier reports. High levels of existing homes listed for sale and fewer overall sales are helping buyers, CMHC said.

"Market conditions will favour homebuyers, who will benefit from more choice and lower prices than in recent years," it said. Homebuyers will also be drawn back to the market by stronger job growth in B.C. next year, it said.

In the Vancouver area, the average house price will fall to $527,000 this year from $593,767 in 2008. The price should rise slightly to $528,000 next year, CMHC said.

Nationally, new-home construction is expected to drop 24 per cent but rebound in 2010, CMHC said.

Housing starts are expected to be 160,250 units for 2009, down from 211,056 units in 2008, CMHC said.

Looking to 2010, starts should rise a bit to 163,350 units, CMHC said, while home sales and prices are also expected to climb. The average national home price will crawl upward to $288,100 from $287,900 in 2009, it said.

Source: Vancouver Province