Bank economists are offering new forecasts for 2014 that may force brokers to check their optimism at the door – before entering the new year.
“With 11 months of data in, it is now becoming clearer that 2013 home resales in Canada will be quite flat relative to 2012, despite the significant swings that occurred during the year,” according to RBC economists. “We expect a little more than 453,000 units will be sold overall in 2013, essentially equalling the 2012 tally.
“Our projection for 2014 is similarly flat on an annual basis (we forecast 454,000 units sold), with in-year swings bound to occur once again.”
Several banks were quick to respond to CREA’s monthly report, which was released on Monday. In it, the association says it expects 475,000 homes to be sold in 2014 – slightly more than RBC’s forecast.
TD Bank, for its part, shares a similar view with its competitor, stating the housing outlook may not be as rosy as real estate agents think. Still, it will have its upside.
“Reduced housing affordability, thanks to higher mortgage rates, will prevent the housing market from taking off over the next few years,” TD Senior Economist Sonya Gulati said. “In turn, we expect the housing market to undergo a soft landing.”
Not to be left out, the Bank of Montreal weighed in on the near future in its report entitled “Silent Night for the Hard Landing Crowd” stating the rest of this year and next hold less than compelling news for Canada’s housing market – at least as far as mortgages go.
“With total sales nudging up from a year ago in 2013 … we can only conclude that the reality of Canada’s housing market is much more boring than widely advertised,” said Douglas Porter, chief economist with BMO. “And, the moderation in national sales from the summer’s hot level suggests underlying conditions remain well behaved.
“Somewhat softer activity in recent months suggests that the recent pick-up in prices should also moderate in 2014.”