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The report predicts that in 2009 multi-family units such as condos and townhomes could exceed single-family homes in B.C. ((CBC))

Anyone looking for a dip in the British Columbia real estate market before buying a home might reconsider their strategy.

A report by the Credit Union Central of British Columbia predicts housing prices will continue to rise by as much as 10 per cent this year and as much as seven per cent in 2009.

Lower mortgage rates, a tight labour market, high income growth and rising in-migration all point to continued high sales volumes and price rises, according the CUCBC's chief economist Helmut Pastrick.

The Economic Analysis of British Columbia released Monday says the current housing boom is unlike previous market cycles that ended with a large oversupply of homes, causing a sharp drop in prices.

In the current market, sales have reached a plateau and the supply of houses is only gradually catching up with demand. And with the recent drop in mortgage rates, the CUCBC expects the number of home sales will pick up once again.

The report says while Vancouver and Victoria set the tone for the B.C. market, prices in areas such as Kamloops, the Kootenay, the Okanagan, and Vancouver Island are forecast to rise as much as 15 per cent, while northern, lumber-dependent communities will have weaker markets.

The high cost of single-family houses for low-income families is restricting the volume of sales in that market, but it is also creating a shift toward more condominium units, said the report.

As a result, the report predicts that in 2009 for the first time, sales of multi-family units such as condominiums and townhomes could exceed those of single-family homes in B.C.

Tenants can expect rents to rise three per cent and rental vacancy rates to drop as low as 0.5 per cent as in-migration continues and fewer renters are able to afford their own homes, says the report.

Despite the growing number of small investors buying into the condominium market, the "flip rate" — selling a property within three months of buying —  remains below two per cent, the report says.

The report concludes that market speculation is limited, but concedes it does not track the speculative purchase of pre-sale contracts for properties under construction.