Wednesday, July 11, 2007

CREA forecast for 2007

New record for MLS® home sales expected again in 2007. National activity to rise 3.6% over last year.
OTTAWA – May 1, 2007 – Boosted by record activity levels in the first quarter,national MLS® home sales activity is expected to reach new heights again in2007, according to a new residential forecast prepared by The Canadian RealEstate Association.National home sales are forecast to rise by 3.6 per cent to 500,995 units in 2007,and will set new records in most provinces. Activity is forecast to edge slightlylower in 2008, but will remain high in all provinces.
The national MLS® residential average price is forecast to rise over the next twoyears. Resale housing markets will become more balanced in all provinces, butwill remain tightest in Western provinces where annual price increases will begreatest.
“Resale housing activity in the first quarter was far stronger than anybody hadanticipated,” said CREA Chief Economist Gregory Klump. “Record-breakingsales activity in the first three months of this year has forced The Canadian RealEstate Association to revise our forecast upward.”“Home buying sentiment remains strong in all regions, and new listings havebeen unable to keep pace with sales activity. The resale housing market willbecome more balanced as rising prices erode affordability and cause a gradualretreat in sales activity,” Klump said. “A strong job market and the continuation oflow interest rates will keep sales activity strong even as prices continue to rise.”
“Residential real estate markets across Canada remain healthy and active, and itis important to note that the negative factors weighing on U.S. home sales arelargely absent in Canada,” said CREA President Ann Bosley. “For local marketexpertise and sound advice, consumers should consult their REALTOR®.”
In British Columbia, sales activity and new listings recently rebounded in anumber of areas, including the Greater Vancouver, Fraser Valley, Okanagan andVictoria markets. While negotiations still favor the seller, the resale housingmarket is becoming more balanced and price increases have begun to moderate.That trend is forecast to continue.
In Alberta, sales and new listings set new records in the first quarter of 2007. Arecent spike in new listings caused the market to become more balanced inCalgary, Edmonton and elsewhere in the province. Price increases this year areforecast to be smaller than they were last year, but remain outsized in mostmarkets. In Saskatchewan, sales have been rising by more than new listings, andnegotiations heavily favor the seller. Prices are forecast to reach new heights inSaskatoon and Regina, the province’s two most active markets.
In Manitoba, a bigger rise in new listings than sales has caused the MLS®housing market to become more balanced, and price increases are beginning toshrink. That trend is forecast to continue, but negotiations will continue to favorthe seller.
In Ontario, a recent increase in sales activity caused the resale housing marketto tighten, although trends for sales activity and new listings vary widely betweenlocal markets. The market is forecast to become more balanced as sales activityedges lower and new listings inch higher in the second half of 2007 and in 2008.
In Quebec, sales activity in the first quarter rose in a number of major marketsand caused the resale housing market to tighten and price increases toaccelerate. A forecast increase in new listings will cause the market to becomemore balanced and price increases to shrink in the second half of the year and in2008.
In New Brunswick, sales activity surged in Saint John and Moncton, whichcaused the resale housing market to tighten in the first quarter. Sales activity isforecast to ease and contribute to a more balanced market, which will causeprice increases to become more modest.In Prince Edward Island, sales activity in the first quarter broke out of its holdingpattern that it had settled into over the past few years, while new listings trendedlower. Although the market tightened as a result, a year-over-year decline inaverage price during the first quarter suggests that entry-level buyers accountedfor much of the jump in sales activity. In keeping with the forecast trend in otherprovinces, sales activity in Prince Edward Island is forecast to retreat this yearbut remain strong and cause the market to become more balanced.
In Newfoundland, seasonally adjusted sales activity shattered all previousrecords in the first quarter. That caused the province’s resale housing market tobecome much tighter. The lack of an accompanying pick-up in price suggeststhat the recent increase in sales activity was fueled by lower-priced transactions.Sales activity is forecast to retreat as new listings gradually increase, leading to amore balanced market and modest price increases.

Source: The Canadian Real Estate Association

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