Central 1 Credit Union

Central 1 Credit Union

September 30, 2010 09:00 ET

Real Estate Sales in BC Forecast to Rise in 2011 and 2012: Improved Affordability, Stronger Economy to Drive Increase, Central 1 Says

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 30, 2010) - According to the latest Economic Analysis of British Columbia (http://www.central1.com/publications/economics/pdf/ea/ea_2010_03.pdf) released today by Central 1 Credit Union (Central 1), the median annual home price in the province is forecast to reach $388,000 this year: a 5 percent increase from 2009.

Prices are forecast to drop 5 percent in 2011 before rebounding slightly in 2012 by 3 percent. Gains in 2010 primarily reflect higher prices and sales activity earlier in the year.

The downward trend in housing sales that has characterized much of 2010 will stabilize in the fourth quarter of this year before trending higher in 2011 and 2012. Residential transactions will fall 7 percent from 2009 levels before rising by a modest by 5 per cent in 2011 and 9 percent in 2012.

"A weak sales environment and elevated inventory levels have led to downward pressure on prices in 2010 and those declines will persist into early 2011," said Bryan Yu, an economist at Central 1. "Lower prices and attractive mortgage rates will be a powerful incentive in attracting an increased number of buyers to the market next year."

However as sales levels remain modest, price levels will remain flat for most of the year.

After a 54 percent rebound in 2010, housing starts are forecast to rise 3 per cent to 25,500 units in 2011 as an increase in multiple-family starts offsets a modest decline in the single-family market. New construction will remain low compared to pre-recession highs when starts consistently ranged between 34,000 to 40,000 units.

On a regional basis, housing sales will remain concentrated in the larger metro areas of Vancouver and Victoria in a continuation of post-recession trends. However, sales declines relative to the previous year will be more significant in these areas, reflecting a sharp rebound in sales observed in 2009 and lower sales in 2010.

Regions with a larger secondary home market and recreational properties experienced a more muted post-recession housing market rebound and will continue to experience a slow market recovery. While the pace of sales is forecast to rise faster than the larger urban markets, overall sales levels will remain well below pre-recession levels.

The complete report is available at http://www.central1.com/publications/economics/pdf/ea/ea_2010_03.pdf.

About Central 1

Central 1 is the central financial facility and trade association for the BC and Ontario credit union systems. Central 1 represents a consumer-oriented, full-service retail financial system that serves 2.9 million members and holds $70 billion in assets, Central 1 is owned primarily by its 45 member credit unions in BC and 137 in Ontario.

With offices in Vancouver and Mississauga (and a Toronto office opening in October), Central 1 provides a wide range of services such as direct banking, flexible payment service solutions and liquidity management.

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