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

Canadian Forces member charged with possessing magic mushrooms in Comox

Master Cpl. Joshua Alexander, with the 407 Maritime Patrol Squadron, facing two drug related charges

Valley mother encourages food literacy and mindfulness with placemats

The Mindful Meals placemats help kids to slow down and pay attention to the food they eat.

Victim of downtown Courtenay assault dies from injuries

RCMP confirm file is now a homicide investigation

North Island College’s annual 3-Hour Fiction Contest returns

Two competitions; one for adults, one for U-18 writers

Comox Valley’s drinking water within lead guidelines, say staff

Residents with old homes may still want testing if concerned about pipes, solder

‘I was bawling’: Injured Bronco’s mother stunned by his progress after surgery

Ryan Straschnitzki isn’t expecting a cure but hopes to restore some muscle movement

EDITORIAL: Ad lacked attention to detail

If you don’t know by now about the unfortunate typo in an… Continue reading

Comox Fire Rescue donates defibrillator to St. George’s United Church

Comox fighters have donated an automatic external defibrillator (AED) to St. George’s… Continue reading

Smudging in B.C. classroom did not affect Christian family’s faith, says school district lawyer

Lawyers make closing arguments in a Port Alberni case about the Indigenous cultural practice

Most B.C. residents, including those hit by 2018 storms, not prepared for outages: report

Create an emergency kit, BC Hydro says, and report all outages or downed lines

Study finds microplastics in all remote Arctic beluga whales tested

Lead author Rhiannon Moore says she wasn’t expecting to see so many microplastics so far north

Services needed in B.C. for early-onset Alzheimer’s disease patients: doctor, advocates

More patients are being diagnosed with Alzheimer’s at an earlier age

Nanaimo man caught with more than 200,000 child porn images to be sentenced

Crown says Aaron Macrae recorded video of children on buses and at his workplace

Vancouver Island hunters may have harvested deer in area known for chronic wasting disease

Conservation officers make urgent request to public for any information

Most Read