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

  • U.S. treasury secretary welcomes Canada's Morneau as first foreign visitor

    Economic CTV News
    WASHINGTON -- The flurry of Canadian cabinet members visiting Washington proceeded Wednesday, with Finance Minister Bill Morneau the latest to head to a U.S. capital awash in policy debates with big implications for the northern neighbour. Source
  • Employment scam tops BBB's list of top scams for 2016

    Economic CBC News
    Canadians lost a reported $90 million to scams last year, according the Better Business Bureau's list of the top ten scams of 2016 The list was compiled with information gathered from the Bureau's scam tracker website, the Canadian Anti-Fraud Centre and concerns from community partners. Source
  • Canadians lost at least $90M in often 'savvy' scams in 2016

    Economic CBC News
    Canadians lost a reported $90 million to scams last year, but the total could be much higher, according to the Better Business Bureau. The BBB's newly released list of the top 10 scams of 2016 includes information from the bureau's scam tracker website, the Canadian Anti-Fraud Centre and concerns from community partners. Source
  • Air Miles sends belated apology to collectors after learning 'humbling lessons' in 2016

    Economic CBC News
    Air Miles wants to make amends with its members for a rough 2016, so it's emailing them an apology of sorts starting Wednesday morning. The year was "challenging" and "we learned very difficult, public and humbling lessons," Blair Cameron, head of Air Miles, says in the letter. Source
  • Hershey expects to cut 15 per cent of global workforce

    Economic CTV News
    HERSHEY, Pa. -- Hershey expects to cut its global workforce by about 15 per cent, with the reductions coming mostly from hourly employees outside the United States. The Pennsylvania chocolate maker also trimmed its forecast for long-term sales growth to between 2 per cent and 4 per cent, down from the previous 3 per cent to 5 per cent. Source
  • Women's retailer BCBG Max Azria seeks creditor protection, will close stores in Canada

    Economic CBC News
    Women's upscale fashion retail chain BCBG Max Azria is seeking protection from creditors in the North America, and plans to restructure, including closing all its standalone stores in Canada. The chain, founded in Los Angeles in 1989, has grown to 550 stores worldwide. Source
  • Uber CEO caught on video arguing about fares

    Economic CTV News
    LONDON -- Uber's CEO says he needs leadership help after a video has emerged of him arguing with a driver about fares. In a video obtained by Bloomberg News, Travis Kalanick is seen discussing Uber's business model with the driver. Source
  • Uber CEO, after outburst caught on video: 'I need leadership help'

    Economic CTV News
    Uber's CEO says he needs leadership help after a video has emerged of him arguing heatedly with a driver about fares. In the latest embarrassment to beset the ride-hailing company, CEO Travis Kalanick is seen discussing Uber's business model with the driver. Source
  • Ont. man denied $10,000 jackpot over casino 'self-exclusion' rule

    Economic CTV News
    An Ontario man was shocked when he recently won more than $10,000 at a casino, only to be told he wasn’t eligible to collect his winnings. John Marando, 82, recently thought he had met a run of great luck, when he won a jackpot while playing a slot machine at the Mohawk racetrack outside of Milton, Ont. Source
  • Ont. man denied $10,002 jackpot over casino 'self-exclusion' rule

    Economic CTV News
    An Ontario man was shocked when he recently won more than $10,000 at a casino, only to be told he wasn’t eligible to collect his winnings. John Marando, 82, recently thought he had met a run of great luck, when he won a jackpot while playing a slot machine at the Mohawk racetrack outside of Milton, Ont. Source