Homes are pictured in Vancouver on April 16, 2019. The average home price is forecast to increase by 4.2 per cent next year in B.C., and 6.9 per cent in Ontario.Jonathan Hayward/The Canadian Press
Canadian home sales are expected to see a healthy increase next year because of sound economic fundamentals and the expectation that the Bank of Canada will not raise interest rates, according to a new forecast from the Canadian Real Estate Association.
CREA says it expects home sales to rise 8.9 per cent next year, with the national average price forecast to rise 6.2 per cent to $531,000. The sales jump is expected to be particularly strong in British Columbia, up 20.9 per cent, as the market continues to recover from a slump in recent years.
The average home price is forecast to increase by 4.2 per cent next year in B.C., and 6.9 per cent in Ontario.
“The national resale housing market outlook continues to be supported by population and employment growth while consumer confidence is benefiting from low unemployment rates outside oil-producing provinces,” CREA said in a statement.
TD economist Rishi Sondhi said he also expects rising sales in 2020 from job growth, population gains and a mild boost from government programs for first-time home buyers, although he says there is some room for caution.
“This view rests on financial conditions remaining accommodative. The backup in bond yields since September, if sustained, could offer some downside risk to our forecast.”
The 2020 forecast came as CREA reported the number of homes sold nationally rose 11.3 per cent in November compared with a year ago, although it pointed out the picture varies significantly by region.
A major rebound in sales in the Greater Vancouver Area and continued growth in the Greater Toronto and Montreal regions propped up sales, while the Prairie cities of Calgary, Edmonton and Regina saw declines.
The increase in sales came as the national average price for a home sold in November was about $529,000, up 8.4 per cent compared with a year ago. Excluding Greater Toronto and Greater Vancouver, the average price was around $404,000, up 6.9 per cent compared with last year. The MLS home price index rose 2.6 per cent year over year to $638,300.
Price gains also saw regional variances, with the Greater Vancouver benchmark price down 4.59 per cent from a year ago and Prairie home prices also down, while Greater Toronto saw gains of 6.52 per cent, Greater Montreal had gains of 8.72 per cent and Ottawa registered gains of 11.45 per cent.
“Sales continue to improve in some regions and not so much in others,” Jason Stephen, president of CREA, said in the release.
In its updated outlook, the association says it expects home sales this year to total 486,800, while it says the national average price is on track to rise 2.3 per cent.
That compared with an earlier forecast for 482,000 home sales for 2019 and a 0.5 per cent increase in the national average price.
Prices rose as the number of newly listed homes slid 2.7 per cent, driven primarily by fewer new listings in the GTA.
Nationally, there is 4.2 months of inventory, the lowest recorded since the summer of 2007. The inventory, which represents how long it would take to liquidate current inventories at the current rate of sales activity, is well below the long-term average of 5.3 months.
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