CREA upgrades home sales forecast for 2019 to show 1.2% improvement

The improvement in sales was driven by the Greater Toronto Area

The Canadian Real Estate Association is upgrading its forecast for 2019 home sales, which are now expected to show a slight improvement compared with last year.

The association said home sales are projected to edge up 1.2 per cent from last year to 463,000 units in 2019 compared with its previous forecast of a decline of 1.6 per cent this year.

READ MORE: Many millennials locked out of the housing market

The updated outlook came as CREA reported home sales in May were up 6.7 per cent compared with a year ago, the largest year-over-year increase since 2016.

On a month-over-month basis, sales in May through the Multiple Listing Service were up 1.9 per cent.

“Defying the gloom-and-doomers, the Canadian housing market is gradually regaining strength, powered by falling long-term interest rates and the fastest population gains in a generation,” Bank of Montreal chief economist Doug Porter wrote in a report.

The improvement in sales was driven by the Greater Toronto Area, which accounted for close to half of the overall increase.

“That rebound in sales has brought the GTA market back into better balance, and has helped lift prices at a moderate pace,” Porter wrote.

The national average price for a home sold in May was close to $508,000, up 1.8 per cent from a year ago. Excluding the Greater Vancouver and Greater Toronto Area, two of the country’s most expensive markets, the average price was just under $397,000.

Home sales softened last year in the wake of new mortgage stress test rules and a rise in mortgage rates.

However, sales have improved in recent months as mortgage rates have trended lower and the economy shows signs of rebounding after the weakness at the end of 2018 and the start of 2019.

TD Bank economist Rishi Sondhi said that markets have also had additional time to adjust to federal and provincial policy measures, which weighed significantly on activity last year.

“Moving forward, we look for sales to trend higher, lifted by a rising population, a more stable rate environment and supportive federal measures,” Sondhi wrote in a report.

CREA also pointed to several changes in the federal budget this year to help potential buyers.

The spring budget raised the maximum individual RRSP withdrawal limit under the home buyers’ plan and announced plans for a new shared equity program to help first time buyers.

However, CREA said the overall level of home sales is expected to remain below where it was in recent years and noted that the outlook for 2019 is below the 10-year average and well short of the record set in 2016, when almost 540,000 homes were sold.

Regionally, the association said New Brunswick is expected to see sales rise 10.6 per cent this year, while Quebec is forecast to climb 7.7 per cent. Ontario is expected to gain 3.9 per cent.

Home sales in British Columbia are expected to drop 13.3 per cent this year, while Alberta is forecast to fall 0.9 per cent.

The national average price is forecast to edge down 0.6 per cent to around $485,000 this year following a 4.1 per cent drop in 2018.

In 2020, CREA predicted home sales will rise 4.4 per cent to 483,200, while the national average price is forecast to edge up by 0.9 per cent to around $490,000 next year.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

County approves hobby farm rezoning Aug. 8

Parcel hosts farm animal rescue operation

‘No Stone Left Alone’ returns to Wetaskiwin Nov. 2

Volunteers needed for poignant remembrance event

Wetaskiwin’s Horses of Hope event raised over $50,000

Organizers note 160 people attended charity dinner

Military posers insult real veterans: writer

Fake medals and bogus insignia insulting to service members

Two subdivisions given County of Wetaskiwin extensions

Both applicants given 12 month extensions to developments

Greta Thunberg meets with First Nations chief in Fort McMurray

Thunberg has turned her protest against climate change into a global movement

More beef products recalled due to possible E. coli contamination

The food safety watchdog has been investigating possible E. coli 0157:H7

Pot legalization has gone ‘well’, but ‘yellow flags’ on vaping: task force chair

Canada legalized cannabis for non-medical use on Oct. 17, 2018,

ELECTION 2019: Federal leaders hit final 24 hours of campaign

Many leaders remain in B.C. for the final hours of the campaign

Leaders pour it on with rallies, boosts for candidates as campaign reaches peak

The federal election campaign has reached a crescendo

Not a political question: Thunberg calls for climate action in Alberta

Edmonton police estimated the size of the crowd at about 4,000

Most Read