According to the latest real estate forecast report, housing markets in Canada are seeing different levels of activity, with cooling in Ontario and Alberta seeing more sales,
This implies that national sales are predicted to fall by 1.5% in 2017 and by 0.8% in 2018, driven by fewer transaction in British Columbia and Ontario, according to the report from the Canadian Real Estate Association (CREA).
Sales in British Columbia are still predicted to decline in 2017 compared to the all-time record fall of 9% in 2016 and Newfoundland and Labrador is also forecast to see a sizeable decline in sales in 2017 by around 11%, continuing a softening trend that stretches back nearly a decade.
Smaller declines in activity are forecast for Saskatchewan of 4.4%, Ontario down 2.1%) and Prince Edward Island down 5.3% while Alberta is forecast to have the largest increase in activity in 2017 with sales rising 10.2%, but this would still leave sales in the province below its 10 year average.
Sales activity is forecast this year to be little changed from last year’s levels with a rise of 0.3% in Manitoba, Nova Scotia up 0.4%, New Brunswick up 1.9% and Quebec up 3.6%.
The national average price is forecast to rise by 7.4% to $526,000 in 2017. Ontario is forecast to have only large average price gain this year at 16%, which would nonetheless represent a moderation from where it is currently for the year to date.
Only Newfoundland and Labrador and Saskatchewan are forecast to see average price declines in 2017, down 5.4% and 1.6% respectively and in line with historically elevated supply in those two provinces. Average price gains are forecast to be around the 2% to 3% range in most other provinces in 2017.
In 2018, national sales are forecast to of 0.8% compared to the 2017 forecast. Most of the annual decline is expected to result from fewer sales in British Columbia and Ontario following expected interest rate increases later in the year.
The national average price is forecast to rise by 1.8% to $535,400 in 2018, with an expected gain of about 5% in Ontario balancing a decline of almost 4% in British Columbia. The forecast increase in Ontario reflects an expected calming of home buying sentiment and modest rebound in sales in the Greater Golden Horseshoe region.
The expected decline in average price for British Columbia is also in part compositional, with Vancouver sales as a share of provincial activity likely to decline as mortgage interest rates rise.
Saskatchewan and Newfoundland and Labrador are projected to see small average price declines in 2018, with home price increases elsewhere forecast to more or less track overall consumer price inflation in 2018.
The report points out that access to financing and affordability for potential home buyers has been reduced by tighter federal regulations announced late last year, together with recent increases in mortgage default insurance premiums and changes to Ontario housing policies.
‘With little more than a month having passed since the provincial changes were announced and implemented, the combined impact of policy changes on home buyer and seller sentiment, sales, listings, and the balance between the two pose potential upside and downside forecast risks,’ it adds.