The Canadian Real Estate Association (CREA) announced today that it has updated its home sales activity forecast for 2015 and 2016 through the Multiple Listing Service (MLS) systems of Canadian real estate boards and associations.
Although oil prices have experienced more stability recently, said CREA in a news release, they remain lower than they were a year ago. How much these lower oil prices will affect the economy is uncertain, but the Prairie provinces are experiencing low consumer confidence which may dissuade future homebuyers.
In March, a large number of homeowners listed properties for sale in Alberta, but supply has fallen since then. A continued gradual improvement in home sales and housing market conditions is expected in oil-producing provinces this year, in line with gradual oil price gains.
The spring market in Nova Scotia is expected to remain slow due to inclement weather, but home sales elsewhere are predicted to grow. In British Columbia and Ontario, a shortage of listings for low-rise properties is expected to drive average price gains above inflation in 2015. Elsewhere in Canada, sales are starting to lower currently elevated listings, but average prices may not experience much growth over the forecast.
CREA’s updated forecast suggests national home sales will increase by 1.3 per cent, to 487,200 units, in 2015. The upward revision comes after British Columbia posted greater than expected activity. The province is projected to see a 12.2-per-cent increase in activity this year, the largest in Canada, while Alberta and Saskatchewan are expected to experience the largest sales declines this year, of 18.2 per cent and 12.9 per cent, respectively.
CREA has also revised upward its forecast for the national average home price, which is now expected to grow to $429,400, for an annual increase of 5.2 per cent in 2015. This takes into account price gains in British Columbia and Ontario and a projected growth in those provinces’ share of national sales. It is predicted that B.C.’s average prices will grow by 8.5 per cent, more than three per cent higher than the national average, while it is predicted that Ontario’s average prices will increase by 5.6 per cent. In other provinces, average prices are expected to remain stable with the exception of Alberta, which will experience a decline in average price of 2.8 per cent as higher-priced property sales slow.
CREA forecasts that national sales will reach 492,100 units in 2016, with sales in Alberta and Saskatchewan expected to increase. Meanwhile, sales in British Columbia may decline by 2.9 per cent due to stretched affordability. More listings are expected to lead to gains in other provinces due to strengthening economic prospects.
CREA predicts the national average price will increase by a further 1.6 per cent, to $436,400, in 2016, with larger increases in British Columbia, Alberta, Manitoba and Ontario. Ontario will see the largest price growth (2.6 per cent) due to low supply in and surrounding the Greater Toronto Area.
Alberta is expected to experience a 2.4-per-cent increase in average prices thanks to an improvement in the share of higher-priced sales activity, while British Columbia and Manitoba are expected to experience two-per-cent gains. Saskatchewan and Quebec are projected to experience one-per-cent growth, while average home prices in the Atlantic region are projected to stay about the same next year.