Home sales ex­pected to drop in 2018: CREA

Journal Pioneer - - BUSINESS - BY ROSS MAROWITS

Canadian home sales are ex­pected to drop to their low­est level in three years in 2018, driven largely by a de­cline in On­tario, the Canadian Real Es­tate As­so­ci­a­tion said Fri­day. The as­so­ci­a­tion ex­pects that 495,100 homes will be sold next year af­ter down­grad­ing its sales fore­cast for 2017 on a 9.9 per cent drop in Au­gust com­pared with a year ago.

It ex­pects sales will fall 2.3 per cent in 2018 fol­low­ing a 5.3 per cent de­cline this year to 506,000, or 20,000 fewer than pre­vi­ously fore­cast in June.

Sea­son­ally ad­justed sales in Au­gust rose 1.3 per cent from the prior month, due to a 14.3 per cent boost in the Greater Toronto Area. Still, sales in this area were down 35 per cent from a year ago. Ben­jamin Reitzes of BMO Cap­i­tal Mar­kets said the Au­gust data sug­gests the worst may have passed for the GTA fol­low­ing On­tario pol­icy changes to re­strict for­eign buy­ers, but the fu­ture is un­clear. “The Bank of Canada’s rate hikes should help con­tain any re­newed ex­u­ber­ance, but if things do heat up again, ex­pect pol­i­cy­mak­ers to step in be­fore too long,’’ he wrote in a re­port.

CREA projects sales in Bri­tish Columbia and On­tario will fall by about 10 per cent in 2017, com­pared to record highs set in 2016.

The as­so­ci­a­tion said sales in Au­gust were down in nearly two-thirds of all lo­cal mar­kets, led by the Greater Toronto Area and nearby hous­ing mar­kets.

In Vancouver, Au­gust sales were up 7.3 per cent from July and 21.3 per cent higher than a year ago. The na­tional av­er­age price is fore­cast to rise by 3.4 per cent to $507,700 in 2017, lower than its prior fore­cast be­cause of fewer lux­ury home sales in the Greater Golden Horse­shoe re­gion of On­tario. How­ever, it is ex­pected to dip by 0.6 per to $503,500 next year largely re­flect­ing that a record num­ber of high-end home sales around Toronto ear­lier this year likely won’t be re­peated in 2018. New­found­land and Labrador sales this year are fore­cast to de­crease by 8.1 per cent, and Saskatchewan down four per cent.

Al­berta is pro­jected to have the coun­try’s largest in­crease at 7.4 per cent, but that’s still be­low the provin­cial 10-year av­er­age.

Sales are fore­cast to grow 5.4 per cent in Que­bec and 5.7 per cent in New Brunswick. Man­i­toba and Que­bec are the only two prov­inces ex­pected to set new an­nual sales records in 2017, while sales in New Brunswick and Prince Ed­ward Island are on track to come up just short of all-time record lev­els.

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