Home sales forecast to crater in ’18 as On­tario sales cool down: CREA

Na­tional fig­ure pro­jected to be low­est in 3 years amid pol­icy changes, rate hikes

Regina Leader-Post - - FINANCIAL POST -

ROSS MAROWITS

MON­TREAL 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-per­cent 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 pol­icy-mak­ers 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 twothirds 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 one year ago.

“Ex­pe­ri­ence shows that home­buy­ers watch mort­gage rates care­fully and that re­cent in­ter­est rate in­creases will prompt some to make an of­fer be­fore rates move higher, while mov­ing oth­ers to the side­lines,” stated CREA pres­i­dent An­drew Peck.

The av­er­age price for a home sold last month was $472,247, up 3.6 per cent com­pared to a year ago. Greater Toronto was up 3.1 per cent and Greater Van­cou­ver 17.9 per cent.

Ex­clud­ing these re­gions, the na­tional av­er­age price was $373,859.

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.

TYLER AN­DER­SON/FILES

Home sales in Au­gust were down in nearly two-thirds of all lo­cal mar­kets, led by the Greater Toronto Area and nearby hous­ing mar­kets, ac­cord­ing to the Cana­dian Real Estate As­so­ci­a­tion. An­a­lyst Ben­jamin Reitzes says the GTA may have al­ready seen the worst.

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.