OTTAWA — Home sales in Canada appear to be stabilizing but activity this year was expected to fall short of 2009 levels, according to the Canadian Real Estate Association.
Sales are expected to reach 442,200 units in 2010, down 4.9 per cent on an annual basis, CREA report Friday. "While monthly levels for sales activity are stabilizing, year-over-year comparisons are likely to remain stretched well into 2011 due to the record-level activity reported in late 2009 and early 2010," it said.
Activity will drop nine per cent to 402,500 units in 2011 due to "lacklustre economic and job growth, muted consumer confidence, and the resumption of interest rate increases are expected in 2011," CREA said.
"Sales activity in the third quarter of 2010 began on a weak footing, but gained traction as the quarter progressed. Improving momentum for home sales activity suggests the resale housing market is stabilizing, but weaker than expected third quarter activity has reduced (our) annual forecast."
Meanwhile, the average home price is forecast to rise 3.1 per cent in 2010 to $330,200, with increases expected in all provinces, CREA said. In 2011, however, the average price is forecast to fall 1.3 per cent to $326,000.
"Housing demand and supply is stabilizing," said CREA chief economist Gregory Klump. "Interest rates are widely expected to remain low for some time due to recent downward revisions by the Bank of Canada to its outlooks for economic growth and inflation. Consumer sentiment will likely remain under pressure until economic prospects improve meaningfully."
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