B.C. Housing Plunges According To Report

Thursday, October 23, 2008

B.C. house prices to head downward until 2010: report

(CBC) - The downturn in B.C.'s housing market will drive prices down another 18 per cent over the next two years, according to a new report that blames the international credit crisis for the fall.

"The widespread impact of the credit crisis on mortgage finance, the economy, and consumer confidence has generated an external shock, sending B.C.'s housing market into recession," said the report released Thursday by the economics department of Central 1 Credit Union.

Since a high in March 2008, B.C.'s residential house prices have fallen 12 per cent, and will fall another 13 per cent in 2009, bringing the provincial median to $310,000, the report concluded.

And despite an anticipated economic recovery in 2010, the median price is expected to drop a further five per cent that year.

The drop in prices continued to be driven by a rising number of new listings and a sharp drop in sales across B.C.'s residential real estate market.

Monthly sales were off 40 per cent from the August 2007 high and heading for 60 per cent, which would make it the steepest decline since the 1981-82 recession, the report said.

The report forecast the number of houses sold would drop a further 17 per cent in 2009, but forecast lower mortgage rates and an improved economy will see housing sales turn upward in 2010, although prices are expected to continue to drop that year.