CREA raises forecast for 2016 home sales, expects fewer sales in 2017

CREA is anticipating that sales will decline in B.C. by 12.2 per cent and in Ontario by 2.7 per cent. Meanwhile, sales in Alberta are expected to rise by 3.5 per cent and in Quebec by 1.2 per cent.

Ottawa made changes in October that required all insured mortgages to undergo a stress test to determine whether borrowers are still able to make mortgage payments if interest rates rise or their income declines.

Previously, such stress tests weren’t required for fixed-rate mortgages longer than five years.

TD Bank economist Diana Petramala said on top of tighter mortgage regulations, mortgage rates have shot up since October.

“As new mortgage regulation and higher interest rates cool activity next year we expect price growth to decelerate to a sub-one per cent pace nationally, but prices in the hot markets in Ontario should continue to grow at a high-single digit pace,” Petramala wrote in a note to clients.

The slowdown in 2017 will follow what is expected to be record year in 2016.

CREA said Thursday that national home sales this year will be slightly higher than its previous estimates, with increased expectations for Ontario offsetting a decline for British Columbia.

The association said the number of sales this year is expected to rise 6.2 per cent to 536,700 units compared with an earlier forecast for a 6.0 per cent increase.

CREA released its updated outlook as it reported home sales through its Multiple Listing Service fell 5.3 per cent between October and November, the largest month-to-month decline since August 2012.

Compared with a year ago, sales volume in November was up 1.6 per cent.

The national average price for a home sold in November was up 7.3 per cent from a year ago at $489,591. Excluding Greater Vancouver and Greater Toronto, the average price was $361,260.

Alexandra Posadzki, The Canadian Press

by Canadian Press

CREA raises forecast for 2016 home sales, expects fewer sales in 2017

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