CREA Updates Resale Housing Forecast
The Canadian Real Estate Association (CREA) has updated its forecast for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards and Associations for 2012 and 2013.
CREA’s previous forecast predicted generally stable resale housing activity in 2012, with growth in Alberta and Saskatchewan offsetting slight sales declines in British Columbia and Ontario. The revised forecast reflects a stronger than expected acceleration of sales activity in Alberta and Saskatchewan, a slightly faster than anticipated slowdown in British Columbia, and continued buoyancy in Ontario sales activity—specifically the Greater Toronto market.
An anticipated recent increase in new listings has so far failed to keep pace with stronger than expected demand in Toronto, which has kept upward pressure on average prices. Forecast sales activity and average price for Ontario have been revised upward as a result.
National resale housing activity is now forecast to reach 475,800 units in 2012, up 3.8 per cent from 2011. Sales for 2013 are now forecast to decline by 1.1 per cent to 470,200 units. Ontario is expected to see the largest decline in activity next year, reflecting a return from currently elevated levels.
“National activity over spring months was stronger than anticipated,” said Wayne Moen, CREA President. “This shows clearly how the continuation of low interest rates is keeping homeownership affordable and within reach.”
CREA had previously forecast sales in 2012 and 2013 that were roughly on par with the 10-year average for annual activity. The updated forecast now predicts activity slightly above the long term average.
The national average home price is forecast to rise by 2.2 per cent to $370,700 in 2012. This is an upward revision from the previously forecast 1.1 per cent decline, reflecting stronger than expected price growth so far this year and compositional impacts on national statistics caused by changes to provincial sales forecasts.
The national average price is also forecast to rise modestly in 2013, edging up two per cent to $378,200.
“CREA’s forecast for annual activity this year has been boosted by what’s already in the rearview mirror,” said Gregory Klump, CREA’s Chief Economist. “Activity is still expected to recede, but from a higher level than previously anticipated. The pace for interest rate increases next year is expected to be very slow and gradual, so combined with further job growth, Canada’s housing market should remain resilient.”