New Westminster Mayor Wayne Wright's two-level, two-bedroom apartment is being offered at a cool $1,099,000.

New Westminster Mayor Wayne Wright's two-level, two-bedroom apartment is being offered at a cool $1,099,000.

(VANCOUVER, BRITISH COLUMBIA) 

- Fears that Vancouver house prices are set to drop dramatically are overstated, says a new forecast by Central 1 Credit Union.

Central 1, the financial facility and trade association for BC credit unions, expects provincial house sales to slow and prices to stabilize, declining this year before rising slightly in 2013 and 2014. 

"Unless there is another recession with large scale job losses in the province, which we do not expect, house prices will temporarily decline by about 5 per cent," says Bryan Yu, economist with Central 1. 

A tumble in Metro Vancouver sales this year will offset gains in other parts of the province, particularly in northern markets, pushing provincial resale transactions down to the lowest level since 2001.

Central 1 released two reports today, one focused on the Vancouver area and a broader look at the housing market across the province for 2012-14. 
Highlights:

• The weak state of demand in Metro Vancouver makes short-term price drops a near-certainty, but the declines will be both modest and temporary.
• Prospective sellers are likely to respond to the weaker market by delaying listing, which will balance the supply of houses for sale.
• Vancouver has become a buyers market with the number of active listings the highest in two years.
• New mortgage rules will keep some buyers out of the market, dampening sales of entry-level homes.
• The rental market will remain tight with few vacancies.
• Province-wide new home starts are forecast to hold steady at 26,700 this year, but edge lower by 1% in 2013 to 26,500 units. Total starts will rebound to 30,000 in 2014.