Demand Will Increase in BC
According to the CMHC, housing demand will increase in British Columbia as we approach midyear due to an improved economy and increased levels of employment with income moderate growth. BC's forecast deviates from the Canada wide prediction that MLS® sales will decline, with 2008's pent up demand subsiding.

Rising employment rates will be a driving factor to the improved housing demand in the province. Greater levels of immigration into British Columbia, both from within and Canada internationally will add approximately 24 thousand new households to the province in 2020-11.

New Housing Starts
In larger urban markets like Vancouver and Surrey Central, listings prices will rise as the demand increases causing more people to list their homes in late 2010. In addition to the increasing resale inventory, new home construction activity will pick up order to meet the rising demand. However, the outlook for 2010 is that new construction could reach 27,300 units, which is the current 10-year average.

This new building activity is in line with the National Housing Outlook. Taking economic uncertainty into account, the report predicts 182,000 housing starts in 2010. The majority of these are expected to go to Ontario and Alberta, with B.C. new construction amounting to healthy 15 per cent.

New homes are also likely be built to smaller specifications in B.C., especially in urban areas. Once the HST comes into effect July 1, builders will be motivated to keep homes under the $525 thousand threshold that the government has determined to be eligible for the HST rebate.

Other Trends Affecting Housing
Interest rates are likely to rise, as the Bank of Canada has wanted to raise them to pre-2009 levels several times since the start of 2010. Financial institutions have hesitated implementing rate increases, as factors such as persistently slow economic growth or large scale events, most recently the oil spill in the Gulf of Mexico, have caused the regulator to exercise caution. Time will tell, but it is more than likely that rates will rise in the early second half of 2010. Where the current five-year rate is assumed to be between 4.2 to 6.7 per cent, the same term is expected to range somewhere between 5.6 and 7.2 per cent. This will slow buying activity, effecting moderating influence the market.