The Fraser Valley housing crunch isn’t expected to significantly ease anytime soon, according to a new report by the Canadian Mortgage Housing Corporation (CMHC).
While the CMHC – Canada’s national housing agency – has warned of problematic conditions in housing markets across the country, their report on the Abbotsford-Mission area suggests a strong economy will continue to spur demand for homes, both among those looking to buy and rent. That demand is predicted to push prices nearly 20 per cent over the next two years.
Some slowdown is expected in the number of sales and acceleration of prices. Nevertheless, the CMHC says “solid economic and demographic fundamentals are supporting buyer demand,” as is the fact that prices in Abbotsford and Mission remain significantly below those in Langley and Surrey.
The report predicts the number of sales will remain above average through 2018. The proportion of those sales involving apartments and townhouses are expected to increase, but the most sales will continue to involve single-family houses.
“The attraction of purchasing these types of properties has traditionally been high in the region and is expected to continue through the forecast period, with demand for single-detached homes coming from young families and move-up buyers while demand for townhomes comes from first-time buyers and people looking to downsize,” the report says.
The CMHC also predicts competition will remain stiff for rental units in the area. The report predicts that the high demand may also push rental rates higher.
Spurring all the housing demand is a strong economy. While unemployment levels rose slightly in 2016, Abbotsford-Mission is expected to see more new jobs over the next two years, thanks to strong manufacturing, construction, and service sectors.
But the forecast isn’t a guarantee, the CMHC cautions. A variety of factors could affect the local housing market, including rising mortgage rates, significantly lower home prices closer to Vancouver, changes to the Canadian dollar, or weaker job growth. New mortgage rules announced earlier this month by the federal government that subject home buyers to a “stress test” could also have an impact.
