The Canadian Real Estate Association (CREA) has updated its quarterly forecast for home sales activity via the Multiple Listing Service and extended it to 2013.
National home sales activity for 2012 and 2013 is projected to remain roughly on par with the 10 year average for annual activity, as interest rates remain low and further economic and job growth continue to support Canada’s housing market.
National resale housing activity is forecast to reach 458,800 units in 2012, representing an annual increase of 0.3% compared to 457,305 sales in 2011. Rising demand in Alberta, Saskatchewan, and Nova Scotia, is expected to offset softer activity in British Columbia, Ontario, and New Brunswick.
‘The continuation of low interest rates is good news for housing and for the economy,’ said Gary Morse, CREA president.
In 2013, national sales are forecast to ebb by 0.3% to 457,200 units, with modest gains in all provinces except Ontario as economic and job growth picks up later this year and builds into 2013.
Multi million dollar sales activity in Vancouver caused the national average price to temporarily spike in early 2011. This phenomenon is not expected to recur in 2012. As a result, while prices are projected to hold steady near current levels, the national average price is forecast to dip by 1.1% in 2012 to $359,100.
Prices are expected to rise modestly in 2013, with the national average inching upward 0.9 per cent to $362,300 at the national level.
‘CREA’s updated housing market forecast reflects recent and prospective trends for provincial home sales activity coupled with prevailing provincial economic outlooks,’ said Gregory Klump, CREA’s chief economist.
‘Risks to the Canadian economic outlook remain elevated owing to the European sovereign debt quagmire, but the continuation of low interest rates is the silver lining. So long as the European debt crisis is contained and a global economic recession avoided, low interest rates will support Canadian home sales and prices. Recent trends are reassuring, but interest rates remaining low for longer will doubtless keep the Canadian housing market under scrutiny for signs of overheating,’ he added.