Home prices in the region will average $942,000 across the full year for all property types – a decline of 7.2 per cent from 2016’s average – before slowly climbing up again by about 2.2 per cent in 2018, the report predicted.

The Fraser Valley is predicted to see a drop in sales volume of 14.7 per cent for the whole of this year, followed by a further decline in 2018 of 4.1 per cent. Prices in the Fraser Valley are expected to see a three per cent average drop this year and a near-two per cent recovery in 2018.

Across the province, after reaching a record high of 112,209 units in 2016, MLS® home resale transactions are likely to drop 14.1 per cent to a total of 96,345 sales in 2017, said the BCREA. Province-wide sales in 2018 are expected to drop a further 0.6 per cent, due to predicted sales declines for that year in the Fraser Valley, Victoria, Vancouver Island and Chilliwack.

 The report said of the BC-wide predictions, “A moderation trend that began early in 2016, combined with tougher federal government mortgage qualification rules and the foreign buyer tax in Vancouver, is expected to limit consumer demand over the next two years. However, housing demand is expected to remain well above the 10-year average of 84,700 unit sales.”

The BCREA said that the average residential resale price in the province would drop five per cent to $657,000 this year, adding that this would stem from increased consumer demand for multi-family homes and a higher proportion of transactions occurring outside the Metro Vancouver market compared with recent years.

“Solid fundamentals continue to underpin housing demand in the province," said Cameron Muir, BCREA Chief Economist. "International trade, population growth and consumer confidence will be key economic drivers this year."

The report added, “While a significant number of new homes are under construction in the province, market conditions will continue to be tilted in favour of home sellers in many regions, while home builders scramble to complete existing projects.”

BCREA's forecast comes just two days after it released its analysis of January home sales across the province, which were down 23 per cent year over year, while average sale prices had dropped 17.5 per cent.