Canada’s population and employment growth, coupled with an expectation of enduring low interest rates, means home sales are forecast to improve over the next year or so.
An updated forecast from the Canadian Real Estate Association calls for 482,000 unit sales in 2019, 5% above the 2018 5-year low and an upward revision of 19,000 units.
The upgrade is mostly (85%) due to expected increases in sales in BC and Ontario, while housing market activity is predicted to remain subdued in the Prairies and Newfoundland and Labrador.
With the reduction in the BoC benchmark interest rate, used to determine affordability for the mortgage stress test, together with the launch of the federal First-Time Home Buyer Incentive, CREA is confident in gains for the market.
However, despite the gains, activity is set to continue to lag the levels seen prior to the implementation of the B-20 mortgage stress test.
The forecast for 2019 on a per capita basis remains the second weakest since 2001.
British Columbia is expected to continue to weigh on national figures in 2019, with a decline of 5.4% compared to 2018. This is expected to be more than offset by gains in Ontario (+8.3%) and Quebec (+9.7%).
Along with BC, Alberta, Saskatchewan and Newfoundland and Labrador are all forecast to come in at or near multi-year lows in 2019.
Manitoba, Quebec and New Brunswick are expected to set new annual sales records while activity in Ontario is forecast to be in line with the 10-year average for the province.
Heading into 2020, things look better with national home sales forecast to rise by 7.5% to 518,100 units next year, but most of this increase reflecting a weak start to 2019 rather than a significant change in sales trends out to the end of next year.
Even with a forecast 14.3% hike in British Columbia's sales in 2010, that only returns activity to in line with the province's 10-year average.
Ontario and Quebec are predicted to see sales rise by about 7% in 2020, while activity in Alberta will recover by about 5% compared to 2019.
The national average price is forecast to advance by 2.1% in 2020 to $501,400, remaining below its 2017 level.
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