OTTAWA, Feb. 8 /CNW/ - The Canadian Real Estate Association (CREA) has
revised its 2011 forecast for home sales activity via the Multiple
Listing Service® (MLS®) Systems of Canadian real estate Boards and Associations, and extended
it to 2012.
Sales in the second half of 2010 rebounded faster than CREA had
previously expected. "The hand-off going into 2011, together with the
highs and lows for sales activity posted in 2010, provided guidance for
CREA's revised forecast," said Gregory Klump, CREA Chief Economist.
"Home buyers recognize that low mortgage interest rates represent a once
in a lifetime opportunity. At the same time, they expect that rates
will rise, so they're doing their homework in order to understand what
it could mean in terms of higher mortgage payments down the road before
they make an offer," said Georges Pahud, CREA President. "The housing
market and buyer psychology is different now than it was at the
beginning of last year, so buyers and sellers would do well to consult
their REALTOR® to understand local market trends."
The upward revision to CREA's forecast for 2011 reflects recent
improvements in the consensus economic outlook and a further expected
improvement in consumer confidence. National sales activity is now
expected to reach 439,900 units in 2011, representing an annual decline
of 1.6 per cent. In 2012, CREA forecasts that national sales activity
will rebound by three per cent to 453,300 units, which is roughly on
par with the ten year average.
"Recent additional changes to mortgage regulations will further ensure
that buyers don't buy more home than they can afford when interest
rates inevitably rise," said Klump. "The announcement of the new
changes to mortgage regulations will likely bring forward some sales
into the first quarter that would have otherwise occurred later in the
year, particularly in some of Canada's more expensive housing markets.
This is expected to produce a milder version of the volatility in sales
activity that we saw last year which resulted from additional
Three transitory factors contributed to volatility in sales activity
last year: changes in mortgage regulations announced last February, the
early withdrawal by the Bank of Canada of its conditional commitment to
keep interest rates on hold until the second half of 2010, and the
introduction of the HST in BC and Ontario during the summer of 2010.
CREA expects that home sales activity will gain traction after dipping
in the second quarter as the economic recovery and job growth continue,
incomes grow, and consumer confidence further improves. "Even though
mortgage interest rates are expected to rise later this year, they will
still be within short reach of current levels and remain supportive for
housing market activity. Strengthening economic fundamentals will keep
the housing market in balance, which will keep home prices stable,"
The national average home price is forecast to rise 1.3 per cent in 2011
and 2012, to $343,300 and $347,900 respectively. Average price is
expected to rise modestly in most provinces, reflecting the
continuation of a healthy balance between supply of, and demand for,
homes listed for sale. Although the supply of new listings is expected
to trend higher, the expected continuation of sellers' market
conditions in Manitoba is forecast to result in a bigger percentage
increase in average price in 2011 and 2012 compared to other provinces.
SOURCE Canadian Real Estate Association
For further information:
Pierre Leduc, Media relations
The Canadian Real Estate Association
613-237-7111 or 613 884-1460