From Our Team: Canada: According to Revised Resale Housing Forecast, Buyers Should Act Now
According to Revised Resale Housing Forecast, Buyers Should Act Now
This past June, the Canadian Real Estate Association (CREA) lowered its forecast for home sales via the Multiple Listing Service (MLS) Systems of Canadian real estate Boards and Associations. CREA’s revised forecast is based on lower-than-expected sales in British Columbia during the first quarter.
The new forecast is also based on changes to mortgage regulations announced this past February. While these changes are expected to only marginally impact home sales activity, it did prompt many buyers to make their real estate purchases before the new regulations took effect in April.
The most important issue that prospective home buyers should be aware of, however, is that on June 1, the Bank of Canada announced its decision to raise its overnight lending rate by 25 basis points to a half percent. According to CREA President Georges Pahud, interest rates are expected to rise “slowly and at a measured place,” however, making home buying well within reach for the near future.
Based on my experience in the real estate industry and the trend data I have access to as a member of the Top 5 in Real Estate Network®, I, along with my team, am advising my clients to act fast if they are considering a home purchase some time this year. Home sales easing sooner than expected this year, combined with only gradually increasing interest rates, means that unique opportunities still abound for home buyers. These opportunities stand to lessen as the year plays out.
CREA predicts that national activity will reach 490,600 units in 2010, up 5.5 percent from 2009 and the second highest annual level on record. This means that bidding wars might heat up in the coming months. The national average home price is forecast to climb 1.6 percent in 2010, reaching a record $325,400, with average price gains forecast in all provinces.
The good news for all homeowners and real estate consumers is that, according to Chief Economist Gregory Klump, “Canada’s solid market trends, conservative lending practices, and prudent borrowing by home buyers 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.”
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