Strong home sales in the summer have prompted the Canadian Real Estate Association to dramatically increase its forecast for sales figures for this year.
The agency is now predicting 432,600 units will change hands this year. That’s only 0.4 per cent below the 2008 figure, and it’s significantly more than the 14.7 per cent sales decline the agency was forecasting as recently as May. “The difference in the resale housing market now, compared to the beginning of the year, is night and day,” CREA President Dale Ripplinger said. “And nowhere is this more evident than in the West.”
British Columbia and Ontario are now forecast to post annual increases in activity this year, reflecting weak demand last year and a subsequent rebound. Forecast declines in annual activity were trimmed significantly in Alberta, Saskatchewan and Quebec and were also scaled back for New Brunswick and Nova Scotia.
For 2010, the agency is now forecasting a 5.3 per cent increase to 455,400 units. That figure is a smaller increase in activity than was previously forecast.
The main reason for the downgrade is that demand is shifting as buyers move ahead their purchase decisions to take advantage of low interest rates, said CREA chief economist Gregory Klump.
Slight price increase forecast
The agency is now forecasting the average home price to edge up 1.5 per cent in 2009, as the strong rebound in sales activity, not price, in some of Canada’s most expensive markets continues to skew the national, and some provincial, average prices upward.
At -4.4. per cent, Alberta is the only province with a forecast decline in average price in 2009. Average prices are forecast to rise in all other provinces except British Columbia, where prices are expected to be flat. CREA’s previous forecast predicted a decline in the national average price of 5.2 per cent in 2009.
The national average price is forecast to be up 2.1 per cent on a year-over-year basis in 2010.