May 9, 2011
The Canadian Real Estate Association announced today that it is revising its forecast of national home sales activity. Thanks largely to high prices in Vancouver, the average home resale price is expected to rise 4 percent by the end of the year rather than the 1.3 percent the CREA had previously expected.
The CREA also said that they expect sales to be slightly stronger than previously forecast – though still down slightly from last year. Instead of a 1.6 percent decline in sales, the association now expects a 1.3 percent decline.
“As expected, recent changes to mortgage regulations brought forward some sales activity into the first quarter that would have otherwise occurred later in the year, particularly in some of Canada’s more expensive housing markets,” said Gregory Klump, CREA’s Chief Economist. “This is likely to result in a milder version of the volatility in sales activity that we saw last year.”
Klump also said that, “the extent to which high priced sales activity in Vancouver will pitch up the average price locally, for British Columbia and nationally will likely diminish in the next couple of months in line with a seasonal increase in national activity. That said, foreign investment in Vancouver residential real estate is showing no signs of slowing, so it seems likely to remain a prominent market feature for some time.”