In a March 15 CNW news release, CREA released its updated predictions for resale activity for the whole of Canada up to the end of next year, noting that the national market will continue to exhibit significant regional disparities.
“Nationally, sales activity is forecast to decline by 3% to 518,700 units in 2017. In line with CREA's previous forecast, the upward revision to the sales forecast for Ontario offsets a downward revision to British Columbia’s,” CREA stated in its release.
“In British Columbia, activity in the Lower Mainland has cooled markedly from all-time highs recorded early last year; however, sales and price pressures elsewhere in the province remain historically strong,” CREA added. “In the resource-intensive provinces of Alberta, Saskatchewan, and Newfoundland and Labrador, sales activity is still running at lower levels and supply is elevated. This has resulted in weakened price trends for these provinces.”
The news release also identified the Greater Toronto Area as a linchpin for further scarcity.
“The balance between supply and demand [in this area] has become increasingly tight. This is expected to lead to continued double-digit price growth, resulting in further erosion in affordability and sales activity in the absence of a significant and sustained rise in new supply,” CREA explained.
And more trouble is brewing in the horizon, the association warned.
“Recently tightened mortgage rules, higher mortgage default insurance premiums and an expected rise in mortgage interest rates all represent headwinds to affordability in all Canadian housing markets. It will be some time before their full impact on housing markets is evident.”
“In some regions, the recently tightened ‘stress test’ for mortgage financing qualification will force some first-time buyers to re-think how much home they can afford and may lead to a drop in home purchases as they shop for a lower priced home. In regions where there is a shortage of lower-priced inventory, some sales may be delayed as buyers save longer for a larger down payment.”
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The Canadian Real Estate Association (CREA) has provided an update of its forecast of home sales that will be made via MLS® Systems across the country.