In a report released today, the Canadian Real Estate Association (CREA) has updated its home sales activity forecast and extended the outlook to 2015. When compared to previous years, national home sales activity via the Multiple Listing Service® has started at lower levels in 2014.
In part, the comparatively lower sales reflect strong levels activity recorded last summer and fall, when many pre-approved buyers advanced their home purchases before their lower pre-approved rates expired. A particularly tough winter in many parts of the country may also have an impact on sales activity.
According to CREA, “with mortgage rates having edged lower, home sales are expected to trend higher heading into the spring, and be further supported over the second half of 2014.” CREA Chief Economist Gregory Klump expects fixed mortgage rates to edge higher in the second half of 2014, adding that these “marginally higher mortgage rates are likely to counterbalance the lift provided by stronger economic and continuing job growth, and restrain the momentum for sales activity.”
CREA predicts that the combination of these opposing factors will most benefit markets where sales are currently weak but prices remain more affordable, as sales in less affordable housing markets are likely to be more sensitive to higher fixed mortgage rates.
Sales are forecast to reach 463,700 in 2014, an increase of 1.3% over 2013, which would place sales in line with their ten-year average. In 2015, CREA predicts that national sales activity will edge up a further 1.2% to 469,400 sales. CREA also notes that “affordability is expected to restrain activity in Canada’s most expensive markets.” The national average home price is expected to rise by 3.8% to $397,000 in 2014 and a further 1.1% in 2015, to $401,400.
Due to the local nature of real estate market trends, it’s important to speak to a Realtor® with experience in your region for a detailed analysis of the real estate market in your area. Feel free to browse our website for a sales representative who can help you.
To read the full report, please visit the CREA website. If you’d like additional information on the Ottawa real estate market, you can contact us directly or call one of our branch locations. Don’t forget to subscribe to our blog or sign up to have real estate news delivered directly to your e-mail inbox.
