CREA lowers home sales forecast

OTTAWA – Existing home sales via its Multiple Listing Service (MLS) will continue to fall both this and next, the Canadian Real Estate Association (CREA) says its updated forecast, citing rising interest rates as the primary cause.

“With interest rates on the rise, home sales have continued to cool. In some parts of the country, home prices have fallen from their peaks reached earlier this year, are flat in some regions, and are still climbing in others. The issue of not enough homes for sale has not gone away,” the realtors’ group said last week.

CREA believes some 532,545 properties will trade hands via its MLS system in 2022, a decline of 20% from the 2021 annual record. This is fewer than forecast in CREA’s previous June forecast and is mostly the result of a downward revision to sales activity in Ontario, along with smaller revisions in British Columbia, Alberta and Quebec.

However, the national average home price is forecast to rise by 4.7% on an annual basis to $720,255 in 2022. That said, much of that increase reflects how high prices were to start the year. Annual price gains are forecast to be largest in Quebec and the Maritimes.

National home sales are forecast to edge back a further 2.3% to 520,156 units in 2023. The national average home price is forecast to slide mostly sideways (+0.2%) from 2022 to 2023 at around $722,000.

Studies conducted by CREA and others have suggested each unit sold generates an average of $6,500 to $7,000 in furniture, mattress and appliance sales over the first three years after closing.  This year’s MLS transactions should translate into $3.7 billion in furniture, mattress and appliance sales over the coming three years.

Related Story: Housing starts keep falling in August: CMHC

Related Story: Existing home sales drop again in August: CREA

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