{"id":9504,"date":"2018-06-21T10:10:39","date_gmt":"2018-06-21T17:10:39","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=9504"},"modified":"2018-06-15T16:08:06","modified_gmt":"2018-06-15T23:08:06","slug":"crea-is-lowering-its-national-home-sales-forecast-due-to-weaker-sales-in-bc-ontario","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2018\/06\/crea-is-lowering-its-national-home-sales-forecast-due-to-weaker-sales-in-bc-ontario\/","title":{"rendered":"CREA is Lowering Its National Home Sales Forecast Due to Weaker Sales in BC &#038; Ontario"},"content":{"rendered":"<p style=\"text-align: justify;\">OTTAWA \u2014 The Canadian Real Estate Association is lowering its national home sales forecast for this year due to weaker sales in BC and Ontario.<\/p>\n<p style=\"text-align: justify;\">The industry association which represents about 100,000 real estate agents across Canada said Friday it now expects home sales this year to fall 11% compared with a year ago to 459,900 units this year. The prediction compared with a forecast for a 7.1% decline the association released in March.<\/p>\n<p style=\"text-align: justify;\">\u201cThe decrease almost entirely reflects weaker sales in BC and Ontario amid heightened housing market uncertainty, provincial policy measures, high home prices, ongoing supply shortages and this year\u2019s new mortgage stress test,\u201d the association said in a statement.<\/p>\n<p style=\"text-align: justify;\">The updated forecast came as CREA reported actual home sales in May hit a seven-year low as they fell 16.2% compared with a year ago.<\/p>\n<p style=\"text-align: justify;\">The national average price for homes sold in May was just over $496,000, down 6.4% from a year ago. Excluding the Greater Toronto and Greater Vancouver areas, the average price was just over $391,100, down 2%.<\/p>\n<p style=\"text-align: justify;\">This drop in sales activity capped off a lacklustre spring homebuying season, as March, April and May are typically the most active months in any given year. National home sales activity in March and April were down 22.7% and 13.9%, respectively, according to CREA numbers.<\/p>\n<p style=\"text-align: justify;\">Combined sales for the three-month period fell to a nine-year low, CREA said Friday.<\/p>\n<p style=\"text-align: justify;\">Factors weighing on home sales include new government measures introduced in British Columbia and Ontario, such as a foreign buyers tax, as well as interest rate hikes by the Bank of Canada.<\/p>\n<p style=\"text-align: justify;\">The association on Friday again pointed the finger at a new stress test introduced at the beginning of the year for uninsured mortgages, which has cut the amount that certain homebuyers are able to qualify for.<\/p>\n<p style=\"text-align: justify;\">\u201cThe stress test that came into effect this year for homebuyers with more than a twenty per cent down payment is continuing to suppress sales activity,\u201d said CREA President Barb Sukkau, in a statement. \u201cThe extent to which it is sidelining home buyers varies among housing markets and price ranges.<\/p>\n<p style=\"text-align: justify;\">As of Jan. 1, the Office of the Superintendent of Financial Institutions requires buyers who don\u2019t need mortgage insurance to prove they can make payments at a qualifying rate of the greater of two percentage points higher than the contractual mortgage rate or the central bank\u2019s five-year benchmark rate.<\/p>\n<p style=\"text-align: justify;\">The bar was raised even higher in May when the central bank\u2019s five year benchmark rate rose from 5.14% to 5.34%. The Bank of Canada uses the posted five-year fixed mortgage rates at the Big Six banks to calculate the benchmark rate. The central bank\u2019s benchmark rate increased, in turn, after all the Big Six banks raised their posted five-year fixed mortgage rates in the preceding weeks, reflecting the higher borrowing costs associated with a recent rise in government bond yields.<\/p>\n<p style=\"text-align: justify;\">\u201cThis year\u2019s new stress-test became even more restrictive in May, since the interest rate used to qualify mortgage applications rose early in the month,\u201d said Gregory Klump, CREA\u2019s chief economist, in a statement Friday. \u201cMovements in the stress test interest rate are beyond the control of policy makers. Further increases in the rate could weigh on home sales activity at a time when Canadian economic growth is facing headwinds from US trade policy frictions.\u201d<\/p>\n<p style=\"text-align: justify;\">CREA\u2019s latest figures support the notion that markets are stabilizing after the volatility at the beginning of 2018 related to the tightened mortgage rules introduced on Jan. 1, said TD economist Rishi Sondhi.<\/p>\n<p style=\"text-align: justify;\">\u201cOn balance, this was a better-than-expected report. Sales were effectively flat during the month \u2014 their best turnout so far this year. Meanwhile, listings increased for the third time in four months, pointing to somewhat improved confidence on the part of sellers as prices edged higher for the second straight month.\u201d<\/p>\n<p><a href=\"http:\/\/vancouversun.com\/real-estate\/crea-cuts-home-sales-forecast-may-sales-down-16-2-compared-with-year-ago\/\" target=\"_blank\" rel=\"noopener\">CREA Cuts Home Sales Forecase, May Sales Down 16.2% Compared with Year Ago<\/a> by Tyler Anderson | Vancouver Sun | The Canadian Press<\/p>\n","protected":false},"excerpt":{"rendered":"<p>OTTAWA \u2014 The Canadian Real Estate Association is lowering its national home sales forecast for this year due to weaker sales in BC and Ontario. The industry association which represents &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2018\/06\/crea-is-lowering-its-national-home-sales-forecast-due-to-weaker-sales-in-bc-ontario\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-9504","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>CREA is Lowering Its National Home Sales Forecast Due to Weaker Sales in BC &amp; Ontario &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2018\/06\/crea-is-lowering-its-national-home-sales-forecast-due-to-weaker-sales-in-bc-ontario\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"CREA is Lowering Its National Home Sales Forecast Due to Weaker Sales in BC &amp; Ontario &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"OTTAWA \u2014 The Canadian Real Estate Association is lowering its national home sales forecast for this year due to weaker sales in BC and Ontario. 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