Canadian home sales activity stable in November
A house 'sold' sign is shown in Oakville, Ont., Monday, July 23, 2012. (Richard Buchan / THE CANADIAN PRESS)
OTTAWA -- The Canadian Real Estate Association raised its outlook for home sales for this year and next as mortgage rates have remained low and helped drive sales.
The association said Monday it now expects 481,300 homes sold this year, up from a September estimate of 475,000.
If sales hit the target, it would represent a gain of 5.1 per cent over 2013 and would be the highest level since 2007, when the industry hit a record high.
"With mortgage rates remaining at historic lows since the summer, activity has remained stronger for longer than previously expected and has yet to show clear signs of fading," the association said in its outlook.
Looking forward to 2015, the organization forecast sales will total 485,200 homes, up from an earlier forecast of 473,100.
"In 2015, Canadian exports, job growth and incomes are expected to improve with mortgage interest rates edging only slightly higher. These opposing factors should benefit sales activity in housing markets where demand has been softer and prices have remained more affordable," CREA said.
"Sales in relatively less affordable housing markets are expected to be more sensitive to higher mortgage interest rates."
The revised outlook came as the association reported home sales though its multiple listing service were flat in November compared with October. Compared with November 2013, sales were up 2.7 per cent.
CREA said November sales were up in half of all local housing markets, with increases in Montreal, Edmonton, Winnipeg, Hamilton- Burlington, Barrie and Windsor-Essex.
However, sales were lower in and around the Toronto area.
The national average price for homes sold in November was $413,649, up 5.7 per cent from a year ago.
The increase in the average price last month came as the MLS home price index posted a gain of 5.2 per cent compared with November 2013.
The number of newly listed homes fell 0.4 per cent in November compared to October, while the national sales-to-new listings ratio was 56 per cent in November.
The association considers a sales-to-new listings ratio between 40 and 60 per cent a balanced housing market.