“With national ownership rates near record highs at around 70 per cent and mortgage rates at record lows, there is scant prospect of a sharp upturn in sales,” Sal Guatieri, senior economist for BMO wrote in a special report released Wednesday. “However, steady demand from immigrants (many highly skilled) should continue to support the market. In addition, the Millennial generation will support demand for a few more years, just as their parents did in the 1970s and 80s.”
And there is even good news for the markets who shared the largest brunt of the housing sales decline in January of this year.
“In 2015, depressed sales in Alberta will reduce national demand moderately,” Guatieri wrote. “However, sales should stabilize in 2016 as economic growth (and oil prices) pick up.”
CREA released its January sales number Tuesday, which showed a two per cent nationwide decline in sales year-over-year, which is largely attributed to oil-producing regions.
Alberta (-28.2 per cent) and Saskatchewan (-21.9 per cent) recorded the largest year-over-year drops, which could largely be attributed to sagging oil prices.
"As expected, consumer confidence in the Prairies has declined and moved a number of potential homebuyers to the sidelines as a result," said CREA President Beth Crosbie.
According to Guatieri, however, the lull will be temporary.
Brokers can expect the next few years to be fruitful, according to one major bank, with Millenials and immigrants expected to bolster many housing markets.