Canada: Housing Market Predicted To Remain Strong

Canadian home sales activity will remain strong in 2008 despite trending lower from record-level activity last year, according to a new residential forecast prepared by The Canadian Real Estate Association. Canadian home sales are forecast to ease 11.5 per cent to 460,900 units in 2008, and to ease a further 4 per cent the following year. Prices are forecast to set new records in every province this year and next, but price gains will be smaller than in recent years.

Canadian home sales are forecast to ease gradually in all provinces in 2008, but record-level activity in Saskatchewan and Newfoundland & Labrador during the first quarter will result in new annual records in these provinces. New listings are forecast to rise in all provinces. The gradual decline in sales activity combined with an increase in new listings will result in a more balanced resale housing market. The market is forecast to remain tightest in Saskatchewan and Manitoba, and as a result price increases there will be biggest.

The average price is forecast to rise 5.3 per cent in 2008 and a further 4.2 per cent next year, pushing prices to new heights. Price gains will become smaller as the resale housing market becomes more balanced.