Due to stronger than expected activity in British Columbia in the first quarter of 2011, the Canadian Real Estate Association (CREA) has increased its Canadian home sales activity forecast for 2011 and 2012. National sales activity is now expected to reach 441,100 units in 2011. While this is a 1.3% decline from 2010, it is an improvement from the 1.6% decline forecast by CREA in February 2011.
In 2012, CREA forecasts that national sales activity will rebound by 2.6% to 452,500 units. This is little changed from the previous forecast, and stands roughly on par with the ten year average for annual activity.
Although sales activity in the first quarter of 2011 came in largely as expected, multi-million dollar property sales in Greater Vancouver surged unexpectedly. These sales have upwardly skewed average sale prices for the province and nationally, prompting the average price forecast to be revised higher.
The national average home price is forecast to rise 4% in 2011 and nine-tenths of a percent in 2012, to $352,500 and $355,800 respectively. This marks an increase from the previous forecast, and underscores the significant effect that investment in British Columbia is and will have on national results.
CREA expects home sales activity to regain traction after dipping in the second quarter as economic recovery and hiring continues. Furthermore, foreign investment in Vancouver residential real estate is showing no signs of slowing, so it seems likely to remain a prominent market feature for some time.