CREA Cuts Home Sales Forecasts as Canada’s Real Estate Slumps
The Canadian Real Estate Association (CREA) released its latest housing forecast update on Monday (September 17). CREA cut its 2012 and 2013 outlook for home sales and lowered its national average price estimate. National resale housing activity is now forecast to rise by 1.9 per cent to 466,900 units in 2012. The Real Estate Association also sees the national sales volume receding by 1.9 per cent to 457,800 units in 2013. Although revised downward, national sales in 2012 and 2013 are forecast to remain roughly on par with the 10 year average, with 2012 coming in slightly above and 2013 slightly below average.
The downgrade came as a result of measures recently brought in by the Canadian federal government aimed at cooling the market – such as lowering the maximum amortisation period. Tighter mortgage lending regulations also helped push August homes sales to their largest monthly drop in two years. Home sales over the Multiple Listing Service (MLS) system fell 5.8 per cent in August from July, which marks the largest month-on-month decline since June 2010. Although the MLS Home Price Index was up 4 per cent from a year ago, this gain actually marks the slowest rate of increase in more than a year.
The Hamilton and Burlington real estate market was among only six out 27 in Canada to record growth in home sales in August over the month before. CREA President Wayne Moen remarked that trends in the national housing market often run contrary to local markets trends, especially in smaller, more affordable markets where sales could actually be on the rise.
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