National MLS® home sales activity will remainstrong in 2008 despite trending lower from record-level activity last year,
according to a new residential forecast prepared by The Canadian Real Estate
Association.
National home sales are forecast to ease 11.5 per cent to 460,900 units in 2008,
and to ease a further four per cent the following year. Prices are forecast to set
new records in every province this year and next, but price gains will be smaller
than in recent years.
MLS® home sales are forecast to ease gradually in all provinces in 2008, but
record-level activity in Saskatchewan and Newfoundland & Labrador during the
first quarter will result in new annual records in these provinces. New listings are
forecast to rise in all provinces. The gradual decline in sales activity combined
with an increase in new listings will result in a more balanced resale housing
market. The market is forecast to remain tightest in Saskatchewan and Manitoba,
and as a result price increases there will be biggest.
The MLS® residential average price is forecast to rise 5.3 per cent in 2008 and a
further 4.2 per cent next year, pushing prices to new heights. Price gains will
become smaller as the resale housing market becomes more balanced.
“MLS® home sales will remain strong, despite coming in lower than last year’s
breakneck pace,” said CREA Chief Economist Gregory Klump. “After-tax income
growth, strong employment and short-term interest rate cuts will support housing
demand, despite further home price increases and increasing economic
uncertainty that are wearing on consumer sentiment about making purchases
such as a car or home,” he said.
“Saskatchewan home sales will benefit from an influx of people moving to the
province, and the resale housing market in Newfoundland & Labrador should
also prove to be exceptional over the next couple of years,” he added. “A strong
natural resource sector there will lift both housing demand and prices.”
“The Canadian resale housing market is on a distinctly different path than the
market in the United States,” says CREA President Cal Lindberg. “CREA expects
the growth in average price to slow in 2008, which is reflected in many markets.
This stands in stark contrast to the U.S. housing market, where prices and sales
activity are on the decline.”