“With mortgage rates remaining at historic lows since the summer, activity has remained stronger for longer than previously expected and has yet to show clear signs of fading,” CREA’s updated resale forecast states. “As a result, the forecast for annual sales in 2014 and 2015 has been upwardly revised. Almost all of the upward revision to national activity in both years stems from the current strength and momentum of sales across most of British Columbia and much of Ontario, particularly in the Greater Golden Horseshoe region.”
British Columbia recently saw activity rise above its ten year average and Ontario has experienced a rise in listings, due to increased demand.
“The recent momentum for sales in both cases has endured for longer than expected and has shown few signs of diminishing,” the report states. “These two provinces together account for more than half of national activity and are responsible for much of the upward revision to projected and forecast national sales.”
A slight increase in interest rates next year are expected to be offset by job, income and export growth. However, pricier cities – such as Toronto and Vancouver – are expected to feel the effects of interest rate hikes.
“These opposing factors should benefit sales activity in housing markets where demand has been softer and prices have remained more affordable,” the reports states. “Sales in relatively less affordable housing markets are expected to be more sensitive to higher mortgage interest rates.”
Record low interest rates have kept brokers busy this year and there are no signs of slowing down on the horizon, according to one association.