Canada’s housing market is expected to stay strong in 2014, while sales of previously owned homes look as though they will exceed earlier expectations, said the country’s largest real estate association.
There’s optimism in Greater Victoria, where Pemberton Holmes real estate agent Nicole Burgess anticipates that 2014 will bring a year of solid sales, following a healthy 2013.
“We’re in a balanced market, generally speaking,” she said Monday.
Entry-level single-family houses in desirable areas with suites to help with the mortgage move quickly, Burgess said. “It’s not a surprise to get competitive offers.”
A big supply of condominiums gives buyers plenty of choice, she said. But some pre-approved buyers are waiting on the sidelines, hoping to see prices drop.
The Canadian Real Estate Association’s 2013 sales projections have risen slightly across Ontario and the four western provinces. The group said Monday that prices have been generally firmer than originally forecast.
“Most housing markets are well balanced, including many large urban centres,” said Gregory Klump, CREA’s chief economist.
“Housing price gains are always stronger in places where supply is tight relative to demand, such as we’re seeing in Calgary and in parts of southern Ontario including the low-rise market in Toronto.
“Prospects for price appreciation will be limited in parts of Quebec and some areas in the Maritimes, where competition among sellers has increased.”
Nationally, CREA is projecting 458,200 homes will be sold through its members this year — eight-tenths of a per cent more than in 2012 and up from the September forecast of 449,900.
CREA also anticipates sales next year will be even stronger, coming in at 475,000 homes nationally, up from the previous 2014 forecast of 465,600.
It projects the national average home price for 2013 will reach $382,200, a 5.2 per cent increase from last year.
In the new year, it projected the national average price for 2014 will be $391,100, up 2.5 per cent from 2013.
November’s home sales dipped slightly from October but were up substantially from the same month last year, when the industry was going through a soft patch because Ottawa tightened rules for mortgage lenders and borrowers.
Bank of Montreal chief economist Douglas Porter said only Victoria, among the country’s 26 largest cities, saw a drop in average home prices so far this year. All the others saw single-digit gains.
“Looking past some of the wild gyrations (and the wilder headlines) of the past year, the broader trends in the Canadian housing market are remarkably calm,” Porter wrote in a note.
The Victoria Real Estate Board has recently started using a benchmark, or typical, home to track sales values. The benchmark for Greater Victoria was $482,300 in November, down from $497,800 a year ago.
TD Economics agrees that the existing home market in Canada is strong, stating that prices and sales have stabilized in recent months.
“While we would not describe the housing market as the comeback kid just yet, the market is certainly showing us its reluctance to fade to the background,” said Sonya Gulati, TD senior economist. Reduced housing affordability, due to higher mortgage rates, will prevent the housing market from taking off over the next few years, she said.
— with a file from The Canadian Press