Falling house prices in Kelowna and the Lower Mainland will bring down the median B.C. home value this year for the first time since 2012, a credit union central has forecast.

An economic analysis released by Central 1 predicted that the median price of a home in the province will fall by 4.1% this year, to $515,000.

The firm also predicted a decline in resale transactions for the third year in a row, marking the fewest sales since 2013.

Central 1 said the decline will be caused by the “culmination of federal and provincial policies”, which continue to “weigh heavily on demand”.

“Prospective buyers are on the sidelines,” it added.

“Some involuntarily, as they no longer qualify for enough financing under new mortgage lending restrictions, while some bide their time until declining prices settle in the market.

“Households continue to be constrained by the combination of federal B-20 mortgage stress tests, and provincial measures including the speculation tax, expanded foreign buyer tax and other measures—curtailing sales to newer residents as well as recreational and second-home purchases.”

In Kelowna, Central 1 forecasts a decline in median houses prices of 4.4% to $502,000 this year.

That will be followed by a 2.4% decline in 2020, the firm predicts, with median prices dropping to $490,000.

Then in 2021, prices will rise by 1% to $495,000.

In 2018, prices rose 9.4% and reached a median of $525,000.

The Lower Mainland, however, is predicted to suffer a 7.1% decrease in prices in 2019.

Penticton will see a 1.4% growth this year followed by more modest growth in the succeeding years.

Kamloops is predicted to experience a short decline of 0.7% in 2019 followed by two years of 1.3% growth.

And in Prince George, moderate growth of 2.1%, 3.4% and 2.3% is predicted for 2019–21.

To read the full analysis, click here.