The implementation of the provincial government’s 15% foreign buyers tax is one of the reasons home sales will likely continue to slow in the Vancouver Census Metropolitan Area (CMA), according to a CMHC report released October 26, but sales over the period are expected to remain over the 10-year average.

The CMHC forecasts that in 2016 overall, between 38,600 and 41,400 homes will change hands. This is down from 43,145 units sold in 2015 but remains well above the 10-year average of 33,000 units. In 2017, home sales will dip to between 33,500 and 36,300 units. In 2018, sales are expected to grow slightly, to a range of between 34,400 and 37,600 units.

“MLS sales this year are expected to slow after three consecutive years of double-digit gains,” the CMHC said in its outlook.

“A potential increase in mortgage rates may also have a dampening effect on sales in the outlook, while positive underlying demographic and economic fundamentals are projected to support housing demand.”

These fundamentals include increases in employment and population.

Prices are expected to increase over the next two years, despite slowing sales. In 2016, the average sale price will be between $957,400 and $1,056,600, up from $902,801 in 2015. In 2017, the range will grow to between $966,200 and $1,089,900, and in 2018, the average price will be between $1,006,900 and $1,161,100.

CMHC : Vancouver Home Sales to Continue to Slow Over Next 2 Years by Emma Crawford Hampel | Business in Vancouver