Interest Rates Keeping Buyers Active

While prices are higher this year, lower interest rates will keep buyers active, according to a new forecast. The Canadian Real Estate Association (CREA) said today that home sales activity in Canada will remain relatively unchanged in 2012 from last year, although average prices will be lower in two years than they are now.

National resale housing activity will gain 0.3% from the 457,305 sales last year to reach 458,800 this year, said the CREA. Rising demand in Alberta, Saskatchewan, and Nova Scotia will offset declines in British Columbia, Ontario and New Brunswick, said the report. "The continuation of low interest rates is good news for housing and for the economy," said Gary Morse, CREA's president. In 2013, a similar picture will play out, according to the CREA forecast, with sales slipping 0.3% to reach 457,200. In terms of price, however, the CREA sees the big gains of 2011 coming to a halt this year. The CREA report showed the average home price gained 7.1% last year to reach $363,116. But by the end of this year, it is predicted to dip 1.1% to $359,100, followed by a 0.9% gain in 2013 to $362,300. But in a turbulent global economic environment, the CREA offered no guarantees.

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