A leading realty firm has predicted that home prices in Metro Vancouver will grow by another 7.2 per cent in 2010.
The forecast, released Thursday, is based on the continued surge in property sales during the last half of 2009 stimulated by low mortgage rates. The near record low cost of borrowing is seen as key to driving up demand in the market.
For Metro Vancouver, that should mean upward pressure on prices, along with a modest increase in sales compared with 2009, a year that saw sales and prices return to double-digit increases from the downturn-year of 2008.
However, what actually happens will depend on how banks respond in the second half of the year as the Bank of Canada is free from its commitment to hold its key overnight lending rate at a record low 0.25 per cent until June 2010.
Stability in the economy and sustainable interest rates are primary factors in maintaining healthy growth, with the return of higher prices counting as the biggest risk to the housing market, if rates were to take a substantial rise.
The average price of a Metro Vancouver home, across all property types, averaged over the full year, hit $592,000 in 2009, which was only $1,000 off the peak-price year of 2008.