Canadian Real Estate Association raises 2019 forecast as August home sales up

Sales were up five per cent, compared with the same month last year

A real estate sold sign hangs in front of a west-end Toronto property. THE CANADIAN PRESS/Graeme Roy

The Canadian Real Estate Association raised its forecast for home sales this year, helped by economic fundamentals and falling mortgage rates.

The improved outlook for the year came as CREA reported home sales in August were up five per cent compared with the same month last year.

The organization said Monday that national home sales are now projected to rise to 482,000 units this year, up five per cent from 2018.

In June, CREA predicted sales to climb 1.2 per cent to 463,000 this year.

“Economic fundamentals underpinning housing activity remain strong outside of the Prairies and Newfoundland and Labrador, the association said.

“More importantly for home buyers and housing markets, longer-term mortgage rates have been declining. Among those that have declined is the Bank of Canada’s benchmark five-year rate used by banks to qualify mortgage applicants.”

Home sales weakened last year after Ottawa tightened mortgage qualification rules at the start of 2018 and mortgage rates started to rise.

However, the rates on fixed-rate mortgages started to decline earlier this year and helped fuel a pick up in home sales.

In August, home sales were up in most of the country’s largest markets, including B.C.’s Lower Mainland, Calgary, Winnipeg, the Greater Toronto Area, Ottawa and Montreal.

READ MORE: Micro-investing in B.C. real estate properties

Robert Kavcic, senior economist at BMO Capital Markets, said a solid job market and population flows persist across much of the country, amplified by a drop in five-year fixed mortgage rates since late-2018.

“Yet again, the housing bears are going to have to take their medicine,” Kavcic wrote in a report. “This momentum should continue into the fall.”

On a month-over-month basis, home sales in August were up 1.4 per cent, the sixth consecutive move higher.

Sales were up in slightly more than half of all local markets, with gains led by Winnipeg and an improvement in B.C.’s Fraser Valley.

The actual national average price for a home sold in August was about $493,500, up almost four per cent from the same month last year.

Excluding the Greater Toronto and Greater Vancouver regions, the national average price was less than $393,000, while the year-over-year gain was 2.7 per cent.

The Canadian Press

Like us on Facebook and follow us on Twitter

Just Posted

Trudeau has won the most seats — but not a majority. What happens next?

Trudeau will have to deal with some of the implications of Monday’s result

Skeena-Bulkley Valley once again goes NDP

Smithers mayor Taylor Bachrach set to follow in Nathan Cullen’s footsteps

LIVE MAP: Results in Canada’s 2019 federal election

Polls are now closed across the country

ELECTION 2019: Here are the results from our 12 B.C. races to watch

Incumbents mostly won our 12 key races, but there were a few upsets too

Security guard bitten, punched by patient at Terrace hospital

Violent incident one of many in Northwest B.C., nurses union says

Scheer says Canada more divided than ever, as NDP and Bloc hold cards close

While Liberals were shut out of two key prairie provinces, they took two-thirds of the seats in Ontario

Investor alert: ‘Split games’ pyramid scheme circulating in B.C.

British Columbia Securities Commission issues warning about scheme selling virtual shares

Federal NDP may support B.C. with major projects, Carole James says

SkyTrain Surrey extension, Massey Tunnel need Ottawa’s help

‘Issue-by-issue parliament’: Expert says Liberals need to placate NDP to be effective

Scandals, social issues, racism defined 2019 federal election, SFU prof says

Misconduct investigations spike by 65% across B.C.’s municipal police forces: report

Reports overall up 15 per cent while complaints made by public down seven per cent

‘Wexit’ talk percolates day after Liberals returned to power with minority

An online petition is calling for a western alliance and Alberta to separate

Federal election saw 66% of registered voters hit the polls across Canada

Roughly 18 million people cast their ballots, voting in a Liberal minority government

Alleged RCMP secret leaker must stay with B.C. parents while on bail

Cameron Ortis, 47, is charged with violating the Security of Information Act

‘Inconsistent’ message on climate change hurt Liberals at the polls: SFU prof

Trudeau government will have to make concessions to hold onto power

Most Read