House prices expected to drop in 2017

Five-per-cent fall in detached home values expected next year in the Fraser Valley.

The BC Real Estate Association predicts a decrease in house prices in the Fraser Valley.

Fraser Valley home prices will likely decrease in 2017, but should stay well above 2015 levels, according to a new forecast from the British Columbia Real Estate Association (BCREA).

Average house prices are expected to drop by nearly six per cent in the Fraser Valley Real Estate Board’s (FVREB) territory, which stretches from Abbotsford in the east to White Rock in the west.

Such a drop would bring average house prices across the region down from $938,000 to around $885,000. Detatched house prices in Abbotsford are already significantly lower than both those figures, with a typical house currently costing $663,300.

Detached homes across the region have risen between 25 and 35 per cent over the past 12 months, and the drop predicted by the BCREA would preserve most of those gains.

House prices in Abbotsford have already seen a significant slowdown in recent months, with single-detached prices having dropped slightly since August. Townhome and apartment prices, on the other hand, have continued to rise – albeit at a slow pace.

Across the region, townhouse and apartment prices are expected to decrease by around 1.5 per cent over the next year after double-digit gains since 2015.

“Less frenetic consumer demand has cooled market conditions, putting less upward pressure on home prices,” the BCREA’s forecast says. “Indeed, detached home prices have flattened in many communities. However, attached and apartment conditions haven’t eroded as significantly as their relative affordability continues to fuel demand.

“Moderating consumer demand combined with an elevated level of new home construction will contribute to average home prices edging lower next year. However, most of the change is expected to derive from the high end of the market where price gains in recent years have been unsustainable. More affordable home types are expected to exhibit greater price stability.”

Vancouver is expected to see larger drops, with house prices forecast to decrease by more than 11 per cent in territory covered by the Real Estate Board of Greater Vancouver.