CREA’s resale housing forecast is rather bleak for 2013 – but promises great things for 2014.
“Mortgage rules are expected to remain as they are, so sales should be less volatile than they have been in recent years,” said Gregory Klump, CREA’s chief economist. “Interest rates are also expected to remain low as the economy grows and adds jobs, which is supportive for the resale housing market.”
National sales activity is forecast to reach 441,500 units in 2013, representing a 2.9 per cent decline from 454,573 sales in 2012. This stands 5 per cent below the 10-year average (2003-2012), much lower than the previous forecast for a 2 per cent decline.
In 2014, CREA forecasts that national activity will rebound by 4.5 per cent to 461,200 units, reflecting a slow but steady improvement in activity. This would still leave national sales about one per cent below their 10-year-average, with activity not expected to return to levels recorded in the first half of 2012 at any point in the forecast horizon.
British Columbia is forecast to have a strong sales increase of 9.5 per cent in 2014 – granted from a low base – with most other provinces forecast to post gains in the range between 3 and 5 per cent as the continuation of moderate economic, job, population, and income growth offsets small and gradual interest rates increases next year.
In addition, housing trends for this year are heading in different directions depending on where you live in the country.
Alberta and Manitoba are the only provinces where sales are expected to rise in 2013, albeit modestly. The percentage decline in sales in Saskatchewan, Ontario, Quebec, and Nova Scotia
is forecast to exceed the national result this year. The percentage decline in sales in British Columbia, New Brunswick, and Newfoundland and Labrador is forecast to be less than the national result.
Strong sales in the first half of 2012 cast a long shadow over the year-over-year comparisons during the first half of 2013 in many parts of the country. The smaller annual decline being forecast for British Columbia and New Brunswick reflects a weakening trend in these provinces during the first half of 2012 that was not apparent elsewhere.