There’s not much to cheer about in the Canadian Real Estate Association’s updated forecast report for 2019.
In a report released on Monday, the association predicts a further decline in MLS sales and average prices in the Alberta real estate market.
The CREA report said MLS sales in the province are expected to finish 2018 with 53,000 transactions, which would be a 7.5 per cent year-over-year decline. That will be followed by a further 3.2 per cent decrease in 2019 to 51,300 transactions.
The association estimates the average sale price will fall 2.7 per cent year over year this year to $387,300 and drop another 2.5 per cent in 2019 to $377,600.
At the national level, MLS sales are forecast to end the year down 11.2 per cent from 2017 with 458,200 transactions across the country, followed by another 0.5 per cent dip in 2019 to 456,000.
Nationally, the average sale price is estimated to fall 4.2 per cent this year to $488,600 but rebound with 1.7 per cent growth in 2019 to $496,800.
“While economic and demographic fundamentals remain supportive for housing demand in many parts of the country, policy headwinds together with rising interest rates are limiting access to mortgage financing and negatively impacting homebuyer sentiment,” said CREA. “At the same time, growth in home prices has slowed sharply in some regions. Indeed, home prices are declining in parts of the country where the supply of homes available for purchase is elevated relative to sales.”
The association said national sales activity is falling in 2018 to the lowest level lowest level in five years despite supportive population and job growth.
“In 2019, home sales activity and prices are expected to be held in check by recent policy changes from different levels of government, in addition to additional interest rate increases,” it said.
“The decline in the national average home price in 2018 has been mostly compositional, reflecting fewer sales in British Columbia and Ontario, Canada’s two most expensive provinces by a substantial margin. The projected decline in the weighted national average price (weighted by annual sales by province over the past 10 years) amounts to one per cent.”
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