The Canadian Real Estate Association (CREA) is anticipating lower than previously-forecast home sales and average home prices in B.C. and Canada as a result of weaker than anticipated sales activity this spring in the nation’s four most active provincial markets.
The CREA forecasts 77,600 B.C. homes will be sold in 2010 and 68,900 will be sold in 2011. In 2009, 85,028 homes were sold in the province.
While the average price of a B.C. home was $465,725 in 2009, the CREA said the average price in 2010 is forecast to be $485,500. In 2011, it is predicted to drop to $474,400.
The CREA forecasted that 459,600 homes would be sold in Canada in 2010, a 1.2% decrease from 2009. In 2011, 426,100 homes are projected to be sold across Canada.
The national average home price is forecast to rise 3.5% in 2010 to $331,600, with increases in all provinces.
Weaker than anticipated sales activity during the crucial spring home-buying season in Canada’s four most active provincial markets prompted the downward revision.
According to the CREA, “The decline is consistent with the exhaustion of pent-up demand from deferred purchases during the economic recession, and sales having been pulled forward into early 2010 due to changes in mortgage regulations.”
It said additional expected interest rate increases would keep homebuyers cautious and sales activity is expected to continue easing over the second half of the year.
Weaker economic growth and consumer spending will contribute to a decline in national sales activity in 2011.