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CREA Boosts Annual Resale Housing Forecast. OTTAWA – February 8, 2011 – The Canadian Real Estate Association (CREA) has revised its 2011 forecast for home sales activity via the Multiple Listing Service^® (MLS^®) Systems of Canadian real estate Boards and Associations, and extended it to 2012.

Sales in the second half of 2010 rebounded faster than CREA had previously expected. “The hand-off going into 2011, together with the highs and lows for sales activity posted in 2010, provided guidance for CREA’s revised forecast,” said Gregory Klump, CREA Chief Economist.

“Home buyers recognize that low mortgage interest rates represent a once in a lifetime opportunity. At the same time, they expect that rates will rise, so they’re doing their homework in order to understand what it could mean in terms of higher mortgage payments down the road before they make an offer,” said Georges Pahud, CREA President. “The housing market and buyer psychology is different now than it was at the beginning of last year, so buyers and sellers would do well to consult their REALTOR® to understand local market trends.”

The upward revision to CREA’s forecast for 2011 reflects recent improvements in the consensus economic outlook and a further expected improvement in consumer confidence. National sales activity is now expected to reach 439,900 units in 2011, representing an annual decline of 1.6 per cent. In 2012, CREA forecasts that national sales activity will rebound by three per cent to 453,300 units, which is roughly on par with the ten year average.

“Recent additional changes to mortgage regulations will further ensure that buyers don’t buy more home than they can afford when interest rates inevitably rise,” said Klump. “The announcement of the new changes to mortgage regulations will likely bring forward some sales into the first quarter that would have otherwise occurred later in the year, particularly in some of Canada’s more expensive housing markets. This is expected to produce a milder version of the volatility in sales activity that we saw last year which resulted from additional transitory factors.”

Three transitory factors contributed to volatility in sales activity last year: changes in mortgage regulations announced last February, the early withdrawal by the Bank of Canada of its conditional commitment to keep interest rates on hold until the second half of 2010, and the introduction of the HST in BC and Ontario during the summer of 2010.

CREA expects that home sales activity will gain traction after dipping in the second quarter as the economic recovery and job growth continue, incomes grow, and consumer confidence further improves. “Even though mortgage interest rates are expected to rise later this year, they will still be within short reach of current levels and remain supportive for housing market activity. Strengthening economic fundamentals will keep the housing market in balance, which will keep home prices stable,” said Klump.

The national average home price is forecast to rise 1.3 per cent in 2011 and 2012, to 3,300 and 7,900 respectively. Average price is expected to rise modestly in most provinces, reflecting the continuation of a healthy balance between supply of, and demand for, homes listed for sale. Although the supply of new listings is expected to trend higher, the expected continuation of sellers’ market conditions in Manitoba is forecast to result in a bigger percentage increase in average price in 2011 and 2012 compared to other provinces.

For more information, please contact:

Pierre Leduc, Media relations
The Canadian Real Estate Association
613-237-7111 or 613 884-1460
Email: [email protected]

* Provincial weighted average price for Quebec; does not affect unweighted national average price calculations. Information on Quebec’s weighted average price calculation can be found at:
http://www.fciq.ca/immobilier-economiste.php

About The Canadian Real Estate Association

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 100,000 real estate Brokers/agents and salespeople working through more than 100 real estate Boards and Associations.

BC and Ontario housing markets feel effects of HST in July. OTTAWA (August 16, 2010) – The Canadian Real Estate Association (CREA) says national home sales activity continued to trend down in July 2010. The decline was almost entirely the result of fewer sales in British Columbia and Ontario. A slowdown in demand in these two provinces had been widely expected in July, as many purchases were brought forward into the first half of the year in advance of the introduction of the HST.

Seasonally adjusted national home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards was down 6.8 per cent on a month-over-month basis in July. The national decline was smaller than the previous two months, as July sales in the Prairies and Quebec came in on par with June levels. Declines in British Columbia (-14.1 per cent) and Ontario (-8 per cent) accounted for 85 per cent of the change in national activity in July.

Actual (not seasonally adjusted) national sales activity was 30 per cent lower in July 2010 compared to last year’s record July. Year-to-date transactions are still up 5.6 per cent compared to the first seven months of last year, although this gap is expected to continue to shrink as the year progresses, since activity rose sharply over the second half of last year, reaching levels that are unlikely to be matched in the final five months of 2010.

New supply continues to adjust to lower demand. The seasonally adjusted number of new residential listings on Canadian MLS® Systems declined by 7.2 per cent in July 2010 compared to the previous month. This is the third consecutive month-over-month decrease, and the steepest in more than a decade. Since reaching their most recent peak in April, new listings have fallen 17.5 per cent.

The declining trend in new listings will help maintain the balance between supply and demand, and temper home price volatility. The national sales-to-new listings ratio, a measure of market balance, has held steady between 48 and 49 per cent for the past three months, which is characteristic of a balanced market.

The average price of homes sold via Canadian MLS® Systems in July was $330,351, edging up one per cent from the same month last year. While year-over-year comparisons have been shrinking as prices stabilize, the national average home price is likely somewhat understated this month, since the majority of activity declines occurred in British Columbia and Ontario, which include many of Canada’s most expensive markets.

The same phenomenon is widely known to have caused much of the downward skewing in the national average price during the recession. This is most evident when looking at a breakdown of average prices by province. Average home prices eased slightly in Nova Scotia and Prince Edward Island in July, but gains in every other province exceeded the national increase.

The national weighted average price compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. It climbed four per cent on a year-over-year basis in July 2010. Similarly, the residential average price in Canada’s major markets was up 2.9 per cent year-over-year in July, while the weighted major market average price rose 7.4 per cent.

The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and measures the balance between housing supply and demand. It stood at seven months at the end of July 2010 on a national basis. This is up from 4.4 months one year ago, which was one of the lowest levels in the past three years.

The seasonally adjusted number of months of inventory stood at 7.3 months at the end of July on a national basis. This is the highest level since March 2009, but the pace of monthly gains is slowing as new listings continue to adjust to lower demand.

“The soft sales figures we’re seeing right now can be attributed in part to accelerated home purchases earlier in the year,” said CREA President Georges Pahud.
“Activity may remain at lower levels for some time, but ultimately we expect a more stable market to emerge, with demand coming back into line with economic fundamentals.”

“While the outlook for economic and job growth remains generally positive nationally and in all provinces, the pace of the recovery will vary by region,” he added. “Buyers and sellers should consult with a REALTOR® to find out about conditions in their local market.”

PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month.

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

MLS® is a co-operative marketing system used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 99,000 REALTORS® working through more than 100 real estate Boards and Associations.

Further information can be found at www.crea.ca/public/news_stats/pdfs/media_Jul10rpt_e.pdf

For more information, please contact:
Alyson Fair, Publicist
The Canadian Real Estate Association
P: 613-237-7111 or 613-884-1460
E: [email protected]