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 in 2013 and extended the outlook to include 2014.
National sales activity has held fairly stable after gearing down last August in the wake of changes to mortgage lending rules and guidelines. Supply is responding to lower demand, keeping the housing market in balanced territory and resulting in stable average prices. However, national housing market trends continue to mask some increasingly divergent regional trends.
National sales activity is forecast to reach 441,500 units in 2013. This represents a 2.9 per cent decline from 454,573 sales in 2012, and stands five per cent below the 10-year average (2003 – 2012). It was also a downward revision from the previous forecast for a 2.0 per cent decline.
Alberta and Manitoba are the only provinces where sales are expected to rise in 2013, albeit modestly. The percentage decline in sales in Saskatchewan, Ontario, Quebec, and Nova Scotia is forecast to exceed the national result this year. The percentage decline in sales in British Columbia, New Brunswick, and Newfoundland and Labrador is forecast to be less than the national result.
In 2014, CREA forecasts that national activity will rebound by 4.5 per cent to 461,200 units, reflecting a slow but steady improvement in activity. This would still leave national sales about one per cent below their 10-year-average, with activity not expected to return to levels recorded in the first half of 2012 at any point in the forecast horizon.
“Mortgage rules are expected to remain as they are, so sales should be less volatile than they have been in recent years,” said Gregory Klump, CREA’s Chief Economist. “Interest rates are also expected to remain low as the economy grows and adds jobs, which is supportive for the resale housing market.”

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