Royal Bank of Canada stated in its latest study that home sales should rise 5 per cent this year to more than 505,000, with prices up 4.6 per cent.
“Canada’s housing market is poised to post one of its best years on record in 2015 despite the Canadian economy being hit by a significant negative shock (plunge in oil prices) and a spike in condo completions in some markets,” said RBC economists Craig Wright, Dawn Desjardins, Paul Ferley and Nathan Janzen.
“That said, strong momentum is not equally shared across the country, with home resale activity plummeting in oil industry-sensitive markets (Alberta and Saskatchewan) and soaring in the non-energy-intensive exporting provinces, Ontario and British Columbia,” they added.
As for next year, there will be a “slight easing,” RBC said.
The bank also predicted a contraction for Alberta’s economy, saying in its new Provincial Outlook that they expected a return to positive territory in 2016 with 0.6 per cent growth.
“A renewed downturn in crude oil prices is intensifying the pressures facing the hard-hit energy sector in 2015,” said Wright. “Prospects for a relatively short bout of contraction were further dampened with drought conditions, wildfires and disruptions to crude oil production exacerbating the economic downturn.”
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Despite recent dour economic predictions, especially in the oil patch, Canada’s largest bank says 2015 should be one of the best years ever.