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The Canadian Real Estate Association (CREA) has updated its resale housing forecast in the wake of slumping oil prices and unexpectedly strong activity in Canada’s two hottest housing markets.

Although low oil prices are having a negative effect on real estate movement in energy-sector provinces such as Alberta and Saskatchewan, where sales are expected to be down 21.6 per cent and 12 per cent respectively this year, that won’t be enough to grind national numbers to a halt, CREA forecasted today.

Positive developments in Ontario and British Columbia — which together account for about 60 per cent of housing activity nationally, according to CREA — have led the organization to upwardly revise its resale housing forecast for 2015 and 2016.

Nationwide, CREA now expects the average price for a home to grow 6.2 per cent to $433,000 in 2015 and then slow to a 2 per cent increase equaling $442,400 in 2016. The 2015 forecast is a slight increase from CREA’s last upgraded forecast in June, when it had growth pegged at 5.2 per cent in 2015, or an average price of $429,400. Like with today’s release, CREA partly attributed that number to price gains in British Columbia and Ontario.

Those two provinces are also the driving force behind CREA’s updated outlook for national home sales in 2015. Across the country sales are expected to climb 3.3 per cent to 495,800 units this year, which would be the second highest level on record. Back in June, CREA was calling for a 1.3 per cent increase to 487,200 units by the year’s end. This would have been around the 10-year average. By the end of 2016, CREA has forecasted that sales will hit 495,000.

British Columbia is projected to see 18.1 per cent more sales this year than last, the biggest annual increase of any province, and become the sole province to have the average price of a home rise above the national rate with a provincial increase of 8.5 per cent for 2015.

In Ontario, home sales are expected to climb 7.3 per cent in 2015, with prices increasing at 6 per cent, or roughly the national average increase. These price gains are the result of an insufficient inventory of single-family homes on the market in the GTA, according to CREA, and are expected to continue in 2016 at a rate of 2.8 per cent, the highest rate in the country. “Record levels of activity would likely be higher were it not for a shortage of low-rise homes coming onto the market,” read a statement from CREA.

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