CREA upgrades home sales forecast for 2019 to show 1.2% improvement

The improvement in sales was driven by the Greater Toronto Area

The Canadian Real Estate Association is upgrading its forecast for 2019 home sales, which are now expected to show a slight improvement compared with last year.

The association said home sales are projected to edge up 1.2 per cent from last year to 463,000 units in 2019 compared with its previous forecast of a decline of 1.6 per cent this year.

READ MORE: Many millennials locked out of the housing market

The updated outlook came as CREA reported home sales in May were up 6.7 per cent compared with a year ago, the largest year-over-year increase since 2016.

On a month-over-month basis, sales in May through the Multiple Listing Service were up 1.9 per cent.

“Defying the gloom-and-doomers, the Canadian housing market is gradually regaining strength, powered by falling long-term interest rates and the fastest population gains in a generation,” Bank of Montreal chief economist Doug Porter wrote in a report.

The improvement in sales was driven by the Greater Toronto Area, which accounted for close to half of the overall increase.

“That rebound in sales has brought the GTA market back into better balance, and has helped lift prices at a moderate pace,” Porter wrote.

The national average price for a home sold in May was close to $508,000, up 1.8 per cent from a year ago. Excluding the Greater Vancouver and Greater Toronto Area, two of the country’s most expensive markets, the average price was just under $397,000.

Home sales softened last year in the wake of new mortgage stress test rules and a rise in mortgage rates.

However, sales have improved in recent months as mortgage rates have trended lower and the economy shows signs of rebounding after the weakness at the end of 2018 and the start of 2019.

TD Bank economist Rishi Sondhi said that markets have also had additional time to adjust to federal and provincial policy measures, which weighed significantly on activity last year.

“Moving forward, we look for sales to trend higher, lifted by a rising population, a more stable rate environment and supportive federal measures,” Sondhi wrote in a report.

CREA also pointed to several changes in the federal budget this year to help potential buyers.

The spring budget raised the maximum individual RRSP withdrawal limit under the home buyers’ plan and announced plans for a new shared equity program to help first time buyers.

However, CREA said the overall level of home sales is expected to remain below where it was in recent years and noted that the outlook for 2019 is below the 10-year average and well short of the record set in 2016, when almost 540,000 homes were sold.

Regionally, the association said New Brunswick is expected to see sales rise 10.6 per cent this year, while Quebec is forecast to climb 7.7 per cent. Ontario is expected to gain 3.9 per cent.

Home sales in British Columbia are expected to drop 13.3 per cent this year, while Alberta is forecast to fall 0.9 per cent.

The national average price is forecast to edge down 0.6 per cent to around $485,000 this year following a 4.1 per cent drop in 2018.

In 2020, CREA predicted home sales will rise 4.4 per cent to 483,200, while the national average price is forecast to edge up by 0.9 per cent to around $490,000 next year.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Just Posted

BCHL: Alberni Valley Bulldogs pick up first win of the season on home ice

Bannister, Bosse play the heroes in ‘close’ game with Nanaimo

UPDATE: UVic students killed in Bamfield bus crash were from Winnipeg, Iowa City

RCMP also said a second vehicle was in the area at the time of the collision

Port Alberni’s 35th Toy Run draws 420 riders

Gloomy weather didn’t dampen spirits

Bamfield Road safety concerns resurface after fatal bus crash

Huu-ay-aht First Nations wants a safe route between Bamfield and Port Alberni

2019 FEDERAL ELECTION: Meet the candidates for the Courtenay-Alberni riding

In an effort to inform the Courtenay-Alberni riding constituents, we have supplied… Continue reading

VIDEO: Liberals make child care pledge, Greens unveil platform on Day 6 of campaign

Green party leader Elizabeth May unveils her party’s platform in Toronto

Island campground on the chopping block as ALC deadline looms

Owners fighting to continue facility’s operation, with a huge outpouring of support

B.C. ends ‘birth alerts’ in child welfare cases

‘Social service workers will no longer share information about expectant parents without consent’

U.S. student, killed in Bamfield bus crash, remembered as ‘kind, intelligent, talented’

John Geerdes, 18, was one of two UVic students killed in the crash on Friday night

Free Tesla 3 offered with purchase of Surrey townhome

Century Group’s offer for Viridian development runs through Oct. 31

B.C. communities urged to improve access for disabled people

One in four B.C. residents has disability, most want to work

Sikh millworker lodges human rights complaint against Interfor, again

Mander Sohal, fired from Delta’s Acorn Mill, alleges discrimination based on religion and disability

National weather forecasters predict average fall, cold winter

The Weather Network says precipitation will about average in most parts of Canada

Most Read