Photo by Xynn Tii
The Canadian Real Estate Association (CREA) has issued a new report with slightly improved expectations for next year’s real estate market development. Although the new forecast predicts a 1.3 per cent loss (441,100 units) from 2010 figures, it is still higher than the former 1.6 per cent decline forecast by analysts three months ago. The sector’s poor performance should be finished by 2012, as sales activity is expected to jump ahead by 2.6 per cent to 452,500 units.
Getting over the hurdle
While general sales activity has kept its normal pace so far, the revision of the forecast comes after witnessing an unexpected boost from large, multi-million dollar real estate sales in the Greater Vancouver area. The average sale prices have changed considerably due to high-profile sales, resulting in the adjusted forecast analyses. Canada’s average home price is forecast to surge by 4 per cent in 2011 and 0.9 per cent in 2012, to $352,500 and $355,800 respectively.
“Home buyers expect mortgage interest rates to rise and are mindful of their current and future debt levels. They’re doing their homework to better understand how their mortgage payments and family budget might change down the road before they make an offer,” Gary Morse, CREA President, explained.
However, current development shows that despite spiked interest rates, people still find borrowing very appealing and do not hesitate to get a mortgage to cover their new home purchase. According to CREA experts, sales activity will increase back to its full potential as the economic recovery process proceeds in Canada and brings in more jobs and more money for Canadians.
