The future for Canada’s housing market won’t be nearly as bright as the Canadian Real Estate Association had earlier predicted, the organization now slashing its forecasts for this year and next.
"While we always caution that housing market trends at the national level can and do run counter to trends in many local markets, the decline in activity in August was definitely the result of much of the country moving in the same direction," sais CREA president Wayne Moen Monday.
In its outlook for the year, CREA now maintains that home will rise by 1.9 per cent to 466,900 units in 2012, but slip by 1.9 per cent to 457,800 units in 2013. The revised outlook is more modest than the 3.8 per cent increase over 2011 CREA predicted in June.
The outlook for the national average home price is forecast to rise 0.6 per cent to $365,000 in 2012, edging lower by 0.1 per cent in 2013.
Sales in August, in fact, fell 5.8 per cent compared with July. The year-over-year slip was even greater, down 8.9 per cent.
The downgrade comes as mortgage brokers grapple with the effects of tighter mortgage rules introduced by the federal government in July.
The sale of existing Canadian houses and condos has already gone down for five of the past six months.
Analysts are largely singling out Ottawa’s decision to reduce the maximum amortization for government-insured mortgages to 25 years from 30 as the primary culprit responsible for the slowdown.