The national real estate market is balanced heading into 2012, but leaning toward sellers, according to the Canadian Real Estate Association (CREA) -- a trend likely to support broker commissions.
Sales were up for a third straight month in November, and activity rose in 60 per cent of all local markets. Average home prices are also up 4.6 per cent from a year ago, albeit the smallest increase since January.
“The Canadian housing market is proving resilient in the face of ongoing global economic and financial uncertainty, to the benefit of Canadian economic growth,” said Gary Morse, CREA’s president. “That said, some housing markets are picking up, while others are holding steady or consolidating.”
This year, the price gains are more modest, having already peaked in the spring, said Gregory Klump, CREA’s chief economist.
Still, that modest growth suggests mortgage brokers will see relatively stable compensation on new originations and not the dip some had feared given a slowing economy.
“With interest rates expected to remain low for longer, the housing sector will no doubt be closely watched for signs of excess,” Klump said. “That said, current trends for resale housing and new home constructions suggest that tightened mortgage regulations are working as intended and fostering economic stability in Canada.”
A quarterly economic forecast by TD Economics economists suggested those “signs of excess” are already visible in the housing market.
“The housing market will enter 2012 in a position of moderate overvaluation in existing home prices and an overhang of unsold inventory in the new home market,” said the TD Economics authors. “We anticipate that these excesses will unwind over the next few years, partly reflecting prospects for a normalization in interest rates beginning in 2013.”