Newspaper article The Canadian Press

Canadian Real Estate Association Raises Home Sales Forecast, August Sales Up

Newspaper article The Canadian Press

Canadian Real Estate Association Raises Home Sales Forecast, August Sales Up

Article excerpt

CREA raises 2014 home sales forecast

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OTTAWA - The Canadian Real Estate Association raised its home sales forecast Monday on the back of stronger than expected sales in recent months following a slow start to the year.

The association said sales through its Multiple Listing Service are now expected to total 475,000 homes for 2014, up from a June prediction of 463,400.

The new forecast would mean sales would be up 3.8 per cent compared with 2013 and 2.5 per cent higher than the previous forecast.

Regionally, CREA said the five provinces from Ontario and the West will show gains while the five eastern provinces will show declines.

The association said the frigid winter delayed the start to the 2014 spring home buying season and helped boost sales in May and June.

"Although this boost was and still is expected to be transitory, sales have yet to show signs of cooling as activity strengthened slightly further over the summer," CREA said in its updated forecast.

"The increase reflects continuing strength in home sales among large urban markets that initially drove the spring rebound together with gains in markets where activity had previously struggled to gain traction. Lowered mortgage interest rates supported this trend."

CREA said British Columbia is expected to lead the country with a gain of 11.9 per cent over 2013 sales, followed by Alberta with a gain of 7.7 per cent. Saskatchewan, Manitoba and Ontario are expected to post small increases in the range of one to two per cent.

Meanwhile, Quebec and New Brunswick are expected to post slightly lower sales this year, falling about one per cent compared with 2013. Nova Scotia is expected to fall 3.9 per cent, while Newfoundland and Labrador is forecast to be slip 5.2 per cent.

TD Bank economist Diana Petramala said the Canadian housing market has defied expectations so far this year but she still expects it to cool from its current levels.

"With home prices continuing to rise above incomes, affordability will become an obstacle to housing demand once interest rates do eventually begin to rise," Petramala wrote in a note to clients.

"In addition, there remains a record number of new homes currently under construction, some of which are likely to end up on the existing home market, although construction delays suggest it may happen later than expected. …

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