MLS® home sales activity forecast to remain strong
OTTAWA - November 5, 2007 - National MLS® home sales activity will break all previous annual records in 2007 before easing next year to its second highest level ever, according to a new residential forecast prepared by The Canadian Real Estate Association.
National home sales are forecast to rise by 7.8 per cent to 521,700 units in 2007, and will set new annual records in all provinces east of Alberta. Activity is forecast to edge slightly lower in 2008, but will reach the second highest annual level on record in almost all provinces. Prices are forecast to set new records in every province this year and in 2008, but price increases will be smaller next year.
Price negotiations will continue to favour the seller in every province, even as the resale housing market become more balanced in every province. The markets will be tightest in Saskatchewan and Manitoba, where annual price increases will be greatest.
The MLS® residential average price is forecast to set new records in all provinces this year and next. Price increases will become smaller as the resale housing market becomes more balanced in 2008.
Resale housing activity is projected to ease gradually from current elevated levels in most provinces. New listings are forecast to rise further in all provinces except Alberta, where they are projected to retreat after spiking in the second and third quarters of 2007.
"Resale housing activity remained remarkably strong the third quarter of 2007," said CREA Chief Economist Gregory Klump. "Quarterly transactions reached the highest levels on record in each in each of the first three quarters of 2007, despite the loss of some steam in activity in Alberta."
"More people are moving to British Columbia, Alberta, Saskatchewan and New Brunswick from other provinces than are moving the other way, which will continue to support sales, listings and price increases there," Klump said. Employment and home buying sentiment is running high in all regions, and mortgage financing is still within reach for many potential homebuyers. Further price increases will continue to erode affordability and temper resale housing demand next year."
"Consumers continue to have strong confidence in Canada's resale housing market, and activity will remain high in 2007," said Ann Bosley, President of The Canadian Real Estate Association. Bosley notes the Canadian market has shrugged off the subprime problems that have been affecting the housing market in the United States, and a number of investment funds. "The discount off the posted mortgage interest rate may shrink temporarily in response to an increase in the cost of funds for financial institutions, but financing will remain reasonable and supportive for sales activity."
