The Canadian Real Estate Association (CREA) has updated its forecast for home sales through the MLS Systems for 2016 and has also included 2017 in the revised forecast.
According to the CREA’s recent forecast, housing activity is expected to rebalance in 2016, with declining activity and smaller price gains in both British Columbia and Ontario, bringing about slower national price growth.
Some of the characteristics of Canadian housing markets from 2015 have carried over into this year, and in some cases, they have intensified with time. Interest rates are expected to stay low until the second half of 2017, when administered lending rates will begin to rise.
Resale housing market trends in 2016 are anticipated to be similar to those in 2015, with tight supply causing strong price gains in British Columbia, especially in the Lower Mainland, and Ontario, particularly in and around the Greater Toronto Area. Price gains in those areas are a sharp contrast from the price declines felt elsewhere. With stronger economic growth expected to begin in the later months of 2016, the Canadian housing market is now anticipated to rebalance in 2017.
Sales activity is expected to rise by one per cent nationally to 511,400 units in 2016, although regional housing markets will vary significantly. British Columbia is forecast to have the largest gains in sales activity at 11.8 per cent, while Alberta will likely post the largest sales decline, at -18.7 per cent.
Meanwhile, the CREA’s expectation for national average price is up eight per cent to $478,100 in 2016, due to a large number of sales in Canada’s most expensive markets. British Columbia is expected to see a price increase of 10 per cent annually, while Ontario’s average prices are anticipated to grow 8.2 per cent. Alberta, Saskatchewan, New Brunswick and Newfoundland and Labrador are all expected to see prices of homes fall below the national average.
In 2017, the number of home sales is expected to grow to 513,400 units, a 0.4 per cent increase from 2016’s expected levels. Sales activity may rebound in Alberta, Saskatchewan and Newfoundland and Labrador due to increased consumer confidence. Meanwhile, 2017’s national average price of a home is expected to grow 1.1 per cent year-over-year to $482,500.