While prices are higher this year, lower interest rates will keep buyers active, according to a new forecast.
The Canada Real Estate Association (CREA) said today that home sales activity in Canada will remain relatively unchanged in 2012 from last year, although average prices will be lower in two years than they are now.
National resale housing activity will gain 0.3 per cent from the 457,305 sales last year to reach 458,800 this year, said the CREA. Rising demand in Alberta, Saskatchewan, and Nova Scotia will offset declines in British Columbia, Ontario and New Brunswick, said the report.
“The continuation of low interest rates is good news for housing and for the economy,” said Gary Morse, CREA’s president.
In 2013, a similar picture will play out, according to the CREA forecast, with sales slipping 0.3 per cent to reach 457,200.
In terms of price, however, the CREA sees the big gains of 2011 coming to a halt this year. The CREA report showed the average home price gained 7.1 per cent last year to reach $363,116. But by the end of this year, it is predicted to dip 1.1 per cent to $359,100, followed by a 0.9 per cent gain in 2013 to $362,300.
But in a turbulent global economic environment, the CREA offered no guarantees.
“Risks to the Canadian economic outlook remain elevated, owing to the European sovereign debt quagmire, but the continuation of low interest rates is the silver lining,” said CREA Chief Economist Gregory Klump. “So long as the European debt crisis is contained and global economic recession avoided, low interest rates will support Canadian homes sales and prices.”
Prices are expected to slip the most in British Columbia this year. On the heels of 11.1 per cent gains last year, the province will see the average price drop 4 per cent this year from $561,304 to $539,100. The biggest price gains will be in Manitoba, Newfoundland and Quebec, according to the CREA.