Home sales in British Columbia are expected to end 2017 down 8.8% year-over-year and the decline is forecast to steepen in 2018.

The British Columbia Real Estate Association expects MLS residential sales of 91,700 for 2018, down 10.4% from 2017. However, this is still above the 10-year average of 84,700.

"Housing demand across the province will face increasing headwinds in 2018," said Cameron Muir, BCREA Chief Economist. "A rising interest rate environment combined with more stringent mortgage stress tests will reduce household purchasing power and erode housing affordability."

Muir added that the new mortgage regulations and increasing interest rates are likely to be magnified by the rise in home prices in recent years.

New supply is due to become available in 2018 which will help to ease the at or near record lows for inventory.

Prices are expected to gain 3.1% for 2017 to $712,300 and then rise by 4.6% in 2018 to $745,300.

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