What the Experts Predict for 2014
Canada’s largest real estate association is calling for a strong year in sales for 2014.
The Canadian Real Estate Association projects sales to reach 458,200 units across the country for the year. While this represents a slight increase of eight tenths of one per cent over last year, growth in sales projections are looking upward for the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, and Ontario.
“Most housing markets are well balanced, including many large urban centres,” says CREA chief economist Gregory Klump. “Housing price gains are always stronger in places where supply is tight relative to demand, such as we’re seeing in Calgary and in parts of southern Ontarioincluding the low rise market in Toronto.”
In 2014, national activity is forecast to climb to 475,000 units, which represents a hike of 3.7 per cent. Most of the increase reflects the weak start to 2013, which is not expected to happen again in the early part of this year.
In Toronto, where dire predictions of a housing bubble and a pricing collapse have been bandied about for years now, expect the opposite. According to Central 1 Credit Union, the city’s rising population combined with land supply restrictions will see house prices doubling over the next 25 years.
Expect Ontario house prices to rise about four per cent a year through 2016. The credit union says higher mortgage rates over the next three years will hold back housing sales in Ontario
generally, but will not cause a market correction.
It also predicts the Toronto condo market will slow as builders delay new construction in the face of weaker demand. The uncertainty facing the condo market is driven in large part by the
belief that investors own a large chunk of the market and that speculation in condos could halt if investors get scared. The Canadian Mortgage and Housing Corporation says about 23 per cent of Toronto condos are rented out, while others say that figure is likely closer to 50 per cent.
Central 1 also predicts Ontario’s overall rental apartment vacancy will hold steady at 2.6 per cent through 2014, before declining to less than two per cent in 2016.
In terms of the national picture, British Columbia is expected to post a strong increase in sales at 8.4 per cent for 2014, most provinces will show gains of two to four per cent.
CREA says the national average home price is set to rise by 5.2 per cent to $382,200 with similar gains in the Prairie provinces, Ontario and Newfoundland and Labrador. Smaller gains are
projected for the other provinces.
In Toronto, where the average selling price for December 2013 sales was $520,398 – up by nearly nine per cent compared to the average of $477,756 in December 2012, expect smaller gains of about 1.5 per cent, says CMHC.