Expect lower house prices in oil-producing provinces next year: CREA

OTTAWA -- The Canadian Real Estate Association expects average house prices in Alberta, Saskatchewan and Newfoundland and Labrador to fall next year because of the downturn in the oil industry.

See Full Article

The association is estimating Alberta's average housing price will fall in 2016 by 2.5 percent.

House prices in Saskatchewan are expected to decline by 1.2 per cent and by one per cent in Newfoundland and Labrador.

Canada's national average house price, however, is expected to edge higher by 1.4 per cent in the year ahead, to $448,700 -- with Ontario leading the other regions with an increase of 2.9 per cent.

CREA says that low interest rates will boost sales but that recently announced federal reforms to mortgage lending rules will have a negative effect beyond the intended targets in the Vancouver and Toronto areas -- Canada's most expensive markets.

"Minimum down payments will be going up for homes that sell for more than half a million dollars, so larger more expensive housing markets will be affected most," said CREA chief economist Gregory Klump.

"Unfortunately, the regulatory changes will also cause unintended collateral damage to housing markets beyond Toronto and Vancouver, including places that are facing economic headwinds from the collapse in oil prices."

It says sales activity in Calgary's housing market -- which has been struggling to cope with the drop in oil prices to the lowest levels since early 2009 -- will be one of the markets affected by the higher minimum down payments for properties above $500,000.

The association's 2016 forecast and a revised estimate for this year were released Tuesday with its regular monthly report on activity by member real estate boards across the country.

It says that sales activity was up 1.8 per cent nationally between October and November, although half the markets covered posted declines. As usual, the Lower Mainland area of British Columbia and the Greater Toronto Area in Ontario showed the biggest month-month gains.

Compared with statistics a year earlier, November's sales activity was up 10.9 per cent with gains in two-thirds of local markets -- with Calgary among those to see a decline from what had been historically high levels in November 2014.

The national average sale price was up 10.2 per cent to $456,186. Exluding the Greater Vancouver and Greater Toronto areas, the national average price would have been $338,969 in November, up 3.4 per cent from a year earlier.

The association's MLS home price index was up 7.11 per cent, the largest gain in more than five years.

CREA has revised its 2015 full-year estimates upwards since its September forecast, largely because of the strength of British Columbia and Ontario. The association is now expecting Canada will have the second-highest sales activity on record this year, with an increase of five per cent to 504,000 units this year.

Partially offsetting increases in most provinces, it estimates Alberta will see a 21.4 per cent decline this year. Saskatchewan is also facing a 10.8 per cent decline in transactions compared with 2014, and Nova Scotia will see a 5.1 per cent decline, according to CREA's estimates.

B.C. is expected to have the biggest regional increase, with a 21.4 per cent jump from 2014's sales levels. Ontario home sales are projected to be 9.3 per cent higher in 2015 than last year, but that figure would likely have been higher but for a shortage of low-rise homes around the Greater Toronto Area.



Advertisements

Latest Economic News

  • Nortel Canada to start paying billions to creditors

    Economic CBC News
    Nortel Canada's long-suffering creditors will finally begin to receive their share of more than US$4 billion to be distributed under a plan approved in January, eight years after the former technology titan began bankruptcy proceedings. Nortel Networks Corp. Source
  • Nortel Canada to start paying billions to creditors; first instalment by July

    Economic CTV News
    TORONTO - Nortel Canada's long-suffering creditors will finally begin to receive their share of more than US$4 billion to be distributed under a plan approved in January, eight years after the former technology titan began bankruptcy proceedings. Source
  • Que. construction strike: Day 3 kicks off with little to show at bargaining table

    Economic CTV News
    MONTREAL -- There is little progress to report at the table as Quebec's construction strike enters Day 3. Eric Cote, a spokesman for one association of employers, says negotiations resumed late Thursday and that representatives for his group emerged early today suggesting they were a waste of time. Source
  • Ford's ex-CEO leaves company with $51.1M US

    Economic CBC News
    Ford's former CEO Mark Fields is leaving the company with an estimated $51.1 million US in cash, stock awards and pension benefits. Fields, 56, retired earlier this week after three years as CEO. Ford made record profits during his tenure but its stock price dropped nearly 40 per cent on investors' concerns about the company's future. Source
  • Ford's ex-CEO leaves company with US$51.1 million

    Economic CTV News
    DETROIT -- Ford's former CEO Mark Fields is leaving the company with an estimated US$51.1 million in cash, stock awards and pension benefits. Fields, 56, retired earlier this week after three years as CEO. Source
  • Feds run $21.8B deficit in 16-17, putting them close to target: early analysis

    Economic CBC News
    A preliminary analysis of the federal books suggests the government ran a 2016-17 deficit of $21.8 billion to put the Liberals close to their projection for the fiscal year. The Trudeau government's spring budget projected a shortfall of $23 billion for the fiscal year, without counting a $3-billion risk adjustment added to the accounting framework. Source
  • U.S. GDP reading for start of year revised upward, but still weak

    Economic CBC News
    The U.S. economy started 2017 out with a whimper, but it wasn't quite as weak as first thought. The government revised up its January-March growth reading to a rate of 1.2 per cent — better than an earlier estimate of 0.7 per cent but well below President Donald Trump's ambitious growth targets. Source
  • BlackBerry expecting US$940 million in Qualcomm dispute resolution

    Economic CTV News
    WATERLOO, Ont. -- BlackBerry Ltd. (TSX:BB) says it will receive US$940 million from Qualcomm by May 31 to settle a dispute over royalty payments. An arbitrator sided with BlackBerry in April, and announced an interim award of US$814.9 million plus additional amounts for interest and legal fees. Source
  • World shares weaken ahead of G7 meeting; oil bottoms out

    Economic CTV News
    HONG KONG -- World stock markets weakened Friday as investors awaited the upcoming G-7 summit and oil prices rebounded somewhat as markets shook off initial disappointment over a production cut deal. KEEPING SCORE: European shares opened lower, with France's CAC 40 down 0.8 per cent to 5,297.13 and Germany's DAX lost 0.5 per cent to 12,561.85. Source
  • TSX slips, U.S. markets nearly flat ahead of holiday weekend

    Economic CTV News
    TORONTO -- North American stock markets were generally lower in late-morning trading, but only modestly. The S&P/TSX composite index fell 22.03 points to 15,388.70, after 90 minutes of trading. In New York, the Dow Jones industrial average lost 12.32 points to 21,070.63. Source