Real Estate Market Predictions, British Columbia and Canada
"What remains the greatest source of weakness in today's U.S. economy is a continued source of strength in Canada," says Warren Lovely of CIBC World Markets in a recent report. "While the U.S. housing market is mired in deep recession, Canada's own housing market has demonstrated extraordinary resilience."
This week the Canadian Real Estate Association (CREA) predicted that national home sales will rise to 8.1 per cent in 2007, setting an all-time sales record. Prices are also expected to go up by a whopping 10.4 per cent in 2007, with another 5.5 per cent increase in 2008.
"Resale housing activity was a juggernaut in the second quarter of 2007," says CREA's chief economist Gregory Klump. "Record breaking sales activity in the first and second quarters forced CREA to revise its forecast upward."
Prices are forecast to increase by 17.4 per cent in Saskatchewan, 11.2 per cent in Manitoba, 9.9 per cent in B.C., 9.2 per cent in Nova Scotia, and 8.6 per cent in Ontario this year.
The CMHC forecast says that in 2008, sales will slow and the number of new listings will rise, leading to a more balanced market across the country. It says job growth will slow and won't stimulate housing demand as much as in previous years. CMHC also predicts that mortgage rates and carrying costs will rise, which will ease housing demand from first-time buyers.