By Marina Wang

According to a housing forecast update from the British Columbia Real Estate Association, residential sales are predicted to fall 21 per cent by the end of the year, from 103,768 last year to 82,000 this year. The decline would signify a big drop in commission income for real-estate agents as well as affect  the B.C. government revenue from property-transfer taxes.

“The B.C. housing market is grappling with a sharp decline in affordability caused by tough B20 stress test rules for conventional mortgages,” BCREA chief economist Cameron Muir said in a news release. “While these rules have had a negative effect on housing demand across the country, the impact has been especially severe in B.C.’s large urban centres because of already strained housing affordability.”

The largest drops in sales are forecasted for the Fraser Valley and Greater Vancouver areas, with 26.3 and 25.7 per cent decreases respectively. Sales are expected to increase slightly in Northern B.C. The BC real estate association also predicted housing sales to increase by eight per cent in 2019, up to 88,700 units.

According to the media release, despite policy driving down housing demand, many demographic factors continue to drive the market. Millenials are now entering “household-forming years”, and low uemployment rates lead to an increase in wages and subsequently, household wealth and confidence.

“After trending at decade lows, active listings in the province were up nearly 20 per cent in July,” reads the news release. “The combination of slower housing demand and an increase in the inventory of homes for sale has trended most markets toward balanced conditions. This means more selection for home buyers, fewer multiple offer situations and less upward pressure on home prices.”