Home sales look brighter

The Canadian housing market continues to exceed expectations and is now forecast by many experts to remain healthy well into next year despite a slowdown in the overall economy.

Except for a few other houses in the subdivision the three show homes in the new Aspen Lakes subdivision

Except for a few other houses in the subdivision the three show homes in the new Aspen Lakes subdivision

The Canadian housing market continues to exceed expectations and is now forecast by many experts to remain healthy well into next year despite a slowdown in the overall economy.

The Canadian Real Estate Association revised its forecast upward Tuesday after reporting strong October sales. It now projects sales this year will be up 1.4 per cent from 2010, half a percentage point better than its previous forecast.

However, CREA expects there will be slightly fewer units sold next year than in 2011, but the 0.5 per cent decline is still an upward revision of its earlier estimate.

The association forecasts 453,300 home sales countrywide this year, up from 446,915 in 2010. The forecast for 2012 is 451,200 homes sold.

The latest RBC Housing Forecast released Tuesday also predicted 1.4 per cent growth this year, but was more upbeat than CREA about future sales, expecting a 0.4 per cent increase in 2012.

The revisions come at a time when central banks in Canada and the United States are keeping their key lending rates low to counter slowing global economic growth.

“There was no shortage of headline news in October about global financial market volatility and economic uncertainty, but it doesn’t appear to have dampened homebuyers’ spirits,” said Gary Morse, CREA’s president.

“Interest rates are at low levels and are likely to stay that way for some time to come. Homebuyers clearly see the opportunities that the current interest rate environment presents.”

The assurance of relatively low borrowing costs has likely given home buyers confidence while rising home values have kept new listings at a healthy level. Stable employment has provided some assurance to owners and buyers alike.

However, heavy borrowing activity signals dark clouds on the horizon for some households as debt reaches record levels. The most over-leveraged Canadians could find themselves unable to cope when interest rates eventually rise, federal Finance Minister Jim Flaherty and Bank of Canada governor Mark Carney have warned.

Last month, sales activity on CREA’s multiple listing service was the highest since January and the national average price was up 5.5 per cent from October 2010.

Sales totalled 38,533 in October, up 8.1 per cent. The national average price for homes sold in October was $362,899, up from $343,950 — although average prices in local markets varied widely.

The RBC forecast also noted that home buyers do not appear to be fazed by news of worsening economic conditions.

“Developments in global financial markets since July have somewhat altered the economic landscape but, perhaps surprisingly, not the bottom line for Canada’s housing market,” RBC senior economist Robert Hogue said in the report.

Hogue now expects home prices to rise 5.3 per cent overall in Canada, compared with RBC’s earlier projection of 4.3 per cent, and by 0.5 per cent next year, up from the earlier forecast of a 0.1 per cent gain.

CREA forecasts a national average price rise of seven per cent in 2011 to $362,700, up from $339,049 last year. It expects prices to remain steady in 2012.

But while home prices keep inflating as demand remains robust, the October increase was actually the lowest since January, a welcome sign for overheating home prices, said CIBC economist Benjamin Tal.

“House prices, regardless how you look at them, they’re overshooting, vis-a-vis rent, vis-a-vis income, even vis-a-vis demographics,” Tal said.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

The QEII was closed Sunday morning due to a pole fire. (Photo courtesy City of Red Deer)
UPDATE: QEII near Red Deer reopens

The QEII has been reopened after being closed due to a pole… Continue reading

Innisfail RCMP are investigating a single-vehicle crash that happened west of Bowden on March 21, 2021. (File photo by Advocate staff)
Bashaw RCMP investigate fatal collision in central Alberta

Bashaw RCMP are investigating after a fatal collision Saturday afternoon. Police were… Continue reading

A damaged unicorn statue is shown in a field outside of Delia, Alta. in this undated handout photo. It's not often police can report that a unicorn has been found, but it was the truth Saturday when RCMP said a stolen, stainless-steel statue of the mythical beast had been located in a field not far from where he'd been taken. THE CANADIAN PRESS/HO, RCMP *MANDATORY CREDIT*
Mounties get their unicorn; stolen statue of mythical beast found in Alberta field

DELIA, Alta. — It’s not often police can report that a unicorn… Continue reading

Red Deer Rebels forward Ethan Rowland battles with Medicine Hat Tigers forward Brett Kemp during WHL action at the Centrium Saturday night. (Photo by ROB WALLATOR/Red Deer Rebels)
Tigers claw back, hand Rebels 11th straight loss

Tigers 5 Rebels 2 The same old issues continue to plague the… Continue reading

There were six additional deaths across Alberta reported over the past 24 hours, bringing the death toll to 1,926 since the beginning of the pandemic. (File photo)
Red Deer Public Schools will not pilot the new draft curriculum at its elementary schools. (File photo contributed by Red Deer Public Schools)
UPDATED: Red Deer Public Schools says no to piloting new curriculum

Alberta Teachers’ Association support school boards

People are shown at a COVID-19 vaccination site in Montreal, Sunday, April 18, 2021, as the COVID-19 pandemic continues in Canada and around the world. THE CANADIAN PRESS/Graham Hughes
Federal government to send health-care workers to Ontario, Trudeau says

MONTREAL — Prime Minister Justin Trudeau says federal departments and some Canadian… Continue reading

People cross a busy street in the shopping district of Flushing on Tuesday, March 30, 2021, in the Queens borough of New York. Access to the COVID-19 vaccine in the United States is growing by the day. THE CANADIAN PRESS/AP-Kathy Willens
Despite COVID-19 vaccines, Americans in D.C. not feeling celebratory — or charitable

WASHINGTON — This might make Canadians jealous of their American cousins for… Continue reading

A man pays his respects at a roadside memorial in Portapique, N.S. on Thursday, April 23, 2021. RCMP say at least 22 people are dead after a man who at one point wore a police uniform and drove a mock-up cruiser, went on a murder rampage in Portapique and several other Nova Scotia communities. THE CANADIAN PRESS/Andrew Vaughan
Memorial service in Nova Scotia marks one year since mass shooting started

TRURO, N.S. — A memorial service is planned for today in central… Continue reading

In this April 23, 2016, photo, David Goethel sorts cod and haddock while fishing off the coast of New Hampshire. To Goethel, cod represents his identity, his ticket to middle class life, and his link to one the country's most historic industries, a fisherman who has caught New England's most recognized fish for more than 30 years. (AP Photo/Robert F. Bukaty)
‘It’s more than just a fish:’ Scientists worry cod will never come back in N.L.

ST. JOHN’S, N.L. — The latest assessment of Atlantic cod stocks, whose… Continue reading

FILE - In this Friday Aug. 21, 2020 file photo, Leonid Volkov, a top strategist for Russian opposition leader Alexei Navalny, addresses the media in Berlin, Germany. Activists for imprisoned Russian opposition leader Alexei Navalny are calling for massive protests in the heart of Moscow and St. Petersburg as Navalny's health reportedly is deteriorating severely while on hunger strike. Leonid Volkov, a top strategist for Navalny, said the demonstrations are called on short notice for Wednesday April 21, 2021, because "his life hangs in the balance. ... We don't know how long he can hold on." (AP Photo/Michael Sohn, File)
Navalny’s team calls protests amid reports of failing health

MOSCOW — Associates of imprisoned Russian opposition leader Alexei Navalny called Sunday… Continue reading

Florida Gov. Ron DeSantis gestures during a news conference Sunday, April 4, 2021, at the Manatee County Emergency Management office in Palmetto, Fla. DeSantis has received a single-dose coronavirus vaccine. His office confirmed Wednesday, April 7, 2021 that the Republican governor got the Johnson & Johnson vaccine, which requires only a single dose. (AP Photo/Chris O'Meara, file)
GOP White House hopefuls move forward as Trump considers run

WASHINGTON — Less than three months after former President Donald Trump left… Continue reading

Each spring, the Okanagan Fest-of-Ale is held in Penticton. This year, as a result of the COVID-19 pandemic, the festival will not be held. However, beer is still available. How much do you know about this beverage? (pxfuel.com)
QUIZ: How much do you really know about beer?

Put your knowledge to the test with this short quiz

Ontario Premier Doug Ford points on a COVID-19 caseload projection model graph during a press conference at Queen's Park, in Toronto, Friday, April 16, 2021. Ontario was set to backtrack on controversial new police powers to enforce stay-at-home orders implemented in the battle against COVID-19.THE CANADIAN PRESS/Frank Gunn
Ford backtracks on new police COVID-19 powers amid intense backlash

TORONTO — Furious criticism of new anti-pandemic powers that allow police in… Continue reading

Most Read