CREA upgrades home sales forecast for 2019 to show 1.2% improvement

The improvement in sales was driven by the Greater Toronto Area

The Canadian Real Estate Association is upgrading its forecast for 2019 home sales, which are now expected to show a slight improvement compared with last year.

The association said home sales are projected to edge up 1.2 per cent from last year to 463,000 units in 2019 compared with its previous forecast of a decline of 1.6 per cent this year.

READ MORE: Many millennials locked out of the housing market

The updated outlook came as CREA reported home sales in May were up 6.7 per cent compared with a year ago, the largest year-over-year increase since 2016.

On a month-over-month basis, sales in May through the Multiple Listing Service were up 1.9 per cent.

“Defying the gloom-and-doomers, the Canadian housing market is gradually regaining strength, powered by falling long-term interest rates and the fastest population gains in a generation,” Bank of Montreal chief economist Doug Porter wrote in a report.

The improvement in sales was driven by the Greater Toronto Area, which accounted for close to half of the overall increase.

“That rebound in sales has brought the GTA market back into better balance, and has helped lift prices at a moderate pace,” Porter wrote.

The national average price for a home sold in May was close to $508,000, up 1.8 per cent from a year ago. Excluding the Greater Vancouver and Greater Toronto Area, two of the country’s most expensive markets, the average price was just under $397,000.

Home sales softened last year in the wake of new mortgage stress test rules and a rise in mortgage rates.

However, sales have improved in recent months as mortgage rates have trended lower and the economy shows signs of rebounding after the weakness at the end of 2018 and the start of 2019.

TD Bank economist Rishi Sondhi said that markets have also had additional time to adjust to federal and provincial policy measures, which weighed significantly on activity last year.

“Moving forward, we look for sales to trend higher, lifted by a rising population, a more stable rate environment and supportive federal measures,” Sondhi wrote in a report.

CREA also pointed to several changes in the federal budget this year to help potential buyers.

The spring budget raised the maximum individual RRSP withdrawal limit under the home buyers’ plan and announced plans for a new shared equity program to help first time buyers.

However, CREA said the overall level of home sales is expected to remain below where it was in recent years and noted that the outlook for 2019 is below the 10-year average and well short of the record set in 2016, when almost 540,000 homes were sold.

Regionally, the association said New Brunswick is expected to see sales rise 10.6 per cent this year, while Quebec is forecast to climb 7.7 per cent. Ontario is expected to gain 3.9 per cent.

Home sales in British Columbia are expected to drop 13.3 per cent this year, while Alberta is forecast to fall 0.9 per cent.

The national average price is forecast to edge down 0.6 per cent to around $485,000 this year following a 4.1 per cent drop in 2018.

In 2020, CREA predicted home sales will rise 4.4 per cent to 483,200, while the national average price is forecast to edge up by 0.9 per cent to around $490,000 next year.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A grizzly that was spotted near Newens Road in Smithers has been captured, tagged and relocated. (photo from Facebook)
Smithers grizzly relocated south of Houston

Happy ending for four-year-old male who has been hanging around the Dohler Flats area of town

This weapon was seized by Houston RCMP after a traffic stop Oct. 14 (Houston RCMP photo)
Guns, cash and suspected narcotics seized

Seizure follows traffic stop on Oct. 14

This photo of approximately 10 years ago shows Laureen Fabian, on the left, and daughter Caterina Andrews. Fabian went missing last October and her daughter is looking for answers. (Contributed photo)
Laureen Fabian’s disappearance remains a mystery

It’s been a year since she went missing

Over the years, Janice Blackie-Goodine’s home in Summerland has featured elaborate Halloween displays and decorations each October. (File photo)
QUIZ: How much do you really know about Halloween?

Oct. 31 is a night of frights. How much do you know about Halloween customs and traditions?

FILE - In this Jan. 23, 1987 file photo, actor Sean Connery holds a rose in his hand as he talks about his new movie “The Name of the Rose” at a news conference in London. Scottish actor Sean Connery, considered by many to have been the best James Bond, has died aged 90, according to an announcement from his family. (AP Photo/Gerald Penny, File)
Actor Sean Connery, the ‘original’ James Bond, dies at 90

Oscar-winner was knighted by Queen Elizabeth II in 2000

This house at 414 Royal Ave. became notorious for its residents’ and visitors’ penchant for attracting police. It was also the site of a gruesome torture in August 2018. It was demolished in 2019. KTW
6-year sentence for Kamloops man who helped carve ‘rat’ into flesh of fellow gang member

Ricky Dennis was one of three men involved in the August 2018 attack

Cpl. Nathan Berze, media officer for the Mission RCMP, giving an update on the investigation at 11:30 a.m., Oct. 30. Patrick Penner photo.
VIDEO: Prisoner convicted of first-degree murder still at large from Mission Institution

When 10 p.m. count was conducted, staff discovered Roderick Muchikekwanape had disappeared

Among the pumpkin carvings created this year by Rick Chong of Abbotsford is this tribute to fallen officer Cont. Allan Young.
Abbotsford pumpkin carver’s creations include fallen police officer

Rick Chong carves and displays 30 pumpkins every year

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

An online fundraising campaign in support of the six-year-old boy, Edgar Colby, who was hit by a car on Range Road Oct. 25 has raised more than $62,000 in a day. (Submitted)
$62K raised in 1 day for boy in coma at BC Children’s after being hit by vehicle in Yukon

The boy’s aunt says the family is “very grateful” for the support they’ve received from the community

Health care employees take extensive precautions when working with people infected or suspected of having COVID-19. THE CANADIAN PRESS/Chris Young
WorkSafeBC disallows majority of COVID-19 job injury claims

Health care, social services employees filing the most claims

Conservative leader Erin O’Toole rises during Question Period in the House of Commons in Ottawa on Wednesday October 28, 2020. (Adrian Wyld/The Canadian Press)
Conversion therapy ban gets approval in principle, exposes Conservative divisions

Erin O’Toole himself voted in favour of the bill, as did most Conservative MPs

Most Read