Expect sales activity in 2017 to decline, for the most part
According to the Canadian Real Estate Association (CREA), national sales are forecast to drop in 2017 by 3.3%, compared to the previous year. In its annual year-end report, CREA states: “Transactions in B.C. and Ontario are anticipated to remain strong but fall short of this year’s record levels due to deteriorating affordability, an ongoing shortage of affordably priced listings for single family homes and tightened mortgage regulations.”
As a result, CREA predicts:
→ Home sales to decline in B.C. by 12.2%
→ Home sales to decline in Ontario by 2.7%
→ Home sales to decline in Saskatchewan by 1.2%
→ Home sales to decline in Nova Scotia by 2.1%
→ Home sales to decline in PEI by 2.2%
→ Home sales to decline in Newfoundland & Labrador by 1.4%
However, not all areas will see price declines:
→ Home sales will rise in Alberta by 3.5%
→ Home sales will rise in Quebec by 1.2%
→ Home sales will rise in Manitoba by 0.8%
→ Home sales will rise in New Brunswick by 1.6%
A decline in sales activity should prompt a decline in prices as less activity is usually a result of less demand and less demand usually translates into lower house prices.
For instance, the reduction in home sales in PEI is due, primarily, to an unusually strong 2016 selling season, that “is not expected to reoccur in 2017,” CREA explains in its year-end report. Still, the province can still expect to reap the rewards of a weakened Canadian loonie.
But not all markets should expect price drops in 2017. According to CREA predicitions, home sales will rise in Alberta and Quebec primarily because both markets experienced a slowdown in 2016.
Still, a decline in sales activity will prompt a modest decline in home prices in a few provinces, including: B.C., Saskatchewan, Nova Scotia, PEI and Newfoundland & Labrador.
As a result, CREA predicts that the national average price will actually decline in 2017 by 2.85%, to $475,900.