"an annual increase of 1% is conservative to say the least."

Median prices for the Lower Mainland have gone up 30% in 12 months recently. But they are also presently ~7-8% down from their peak earlier in 2016. Consider the loss for those who bought in the spring, particularly at current valuations.

Real estate markets fall all the time. Further, our provincial economy has grown massively in its reliance on the real estate/construction sector (it's now over 25% and bigger than forestry, mining, and other sectors combined). Real estate prices are decoupled from renting costs to a record degree. If our interest rates don't climb in parallel with US interest rate increases, the CAD will decline further, purchasing power will take a hit, and households will have less to put towards their expenses. 

I don't if/when things will worsen in the New Year, but to take any real estate gain as a given is not even close to a conservative view point.