The Canadian Real Estate Association has dramatically revised its forecast for MLS sales this year, reflecting recent changes in the housing market.
CREA said today that MLS sales in Alberta will drop by 2.9 per cent this year to 55,900 units and fall by another 0.9 per cent in 2011 to 55,400 units.
In its forecast of early February, the national association of realtors had predicted sales in the province this year to increase by 9.1 per cent to 63,050 transactions and another 1.5 per cent in 2011 to 64,000.
CREA said annual activity in Alberta was “revised downward due to weaker than expected activity in the first quarter.”
The forecast for the average MLS sale price in the province has also been lowered for this year. CREA now says it will increase by 2.1 per cent to $348,400 which is down from the previous forecast of an increase of 4.7 per cent to $357,300 this year. However, its revised forecast calls for a 0.7 per cent jump in 2011 to $350,800. Its previous forecast was for a 1.2 per cent increase to $361,700 next year.
At the national level, CREA says a lower forecast for sales reflects a weaker than expected start to the year in British Columbia and recent developments that pulled forward the timing as to when sales are expected to ease in other provinces.
In Canada, the organization is forecasting 5.5 per cent growth in MLS sales this year to 490,600 units followed by an 8.5 per cent decline in 2011 to 448,700 units. In February, it forecast a 13.3 per cent hike to 527,300 transactions in 2010 but a drop of 7.1 per cent to 490,100 units in 2011.
As for the national average price, CREA is now forecasting a 1.6 increase this year to $325,400 followed by a 2.2 per cent decline in 2011 to $318,300.
Its previous forecast called for a 5.4 per cent hike this year to $337,500 followed by a 1.5 per cent decline next year to $332,400.
“With interest rates soon expected to rise, Canada is widely believed to be entering a typical demand-driven downturn due to recent price increases and rising interest rates,” said Gregory Klump, CREA’s chief economist, in a news release. “A downward trend in national sales activity combined with an increase in listings will result in a more balanced market.
“In keeping with the return of a balanced housing market and typical demand-driven housing market cycle dynamics, prices will remain stable. Canada’s solid mortgage market trends, conservative lending practices and prudent borrowing by homebuyers means that Canada will avoid the massive realignment in housing supply and demand being experienced in the United States. Accordingly, Canada will avoid a U.S.-style housing price correction.”
Calgary Herald
