The Canadian Real Estate Association cut its 2012 and 2013 outlook for home sales and lowered its national average price forecast on Monday as it reported the biggest month-to-month drop in activity in two years.
The association said tighter regulations on mortgage lending that came into effect in July helped push August homes sales to the largest month-over-month decline since June 2010.
Sales of previously owned Canadian houses and condos have now gone down in five of the past six months. "While we always caution that housing market trends at the national level can and do run counter to trends in many local markets, the decline in activity in August was definitely the result of much of the country moving in the same direction," CREA president Wayne Moen said.
Sales in August slipped 5.8 per cent compared with July and were down 8.9 per cent compared with August 2011.
In its outlook for the year, CREA said home sales are now forecast to rise by 1.9 per cent to 466,900 units in 2012. That compared with a forecast in June that suggested 475,800 homes would be sold in 2012, up 3.8 per cent from 2011. CREA expects volume will slip by 1.9 per cent to 457,800 units in 2013.
CREA also forecast the average home price would rise by just 0.6 per cent to $365,000 in 2012 and edge lower by one tenth of one per cent to $364,500 in 2013. The outlook was down from a June forecast that prices would rise by 2.2 per cent.
