Province
There won’t be any downturn in Canada’s resale-housing market this year after all, the Canadian Real Estate Association said in revising its projections yesterday. Earlier projections had sales either matching last year or even falling off slightly.
After setting a fifth consecutive annual record last year of 483,250 units, CREA expects national resale-housing activity to inch one per cent higher to 488,160 units in 2006.
But CREA expects 2007 will see the market fall off by 3.3 per cent.
B.C. and Alberta will continue to be the star performers with price increases of around 10 per cent, while CREA projects national MLS residential average prices to increase 6.1 per cent this year and 4.7 per cent next year.
“Further increases in home prices and interest rates may cause resale-housing activity to ease next year, but housing demand will remain very strong and support further price increases,” said CREA’s chief economist Gregory Klump.
“The tax cuts outlined in the 2006 federal budget will ease the overall tax burden for individuals, put money back in the pockets of Canadians and increase consumer confidence about making major purchases.
“The reduction in the GST rate to six per cent and the one-per-cent reduction in the federal portion of the HST will reduce the costs associated with buying, selling and owning a home,” Klump said.
Meanwhile, building permits in March in Greater Vancouver were up 37.4 per cent to $600.4 million compared to $437 million in February, recording the second highest monthly, seasonally-adjusted level on record, according the Vancouver Regional Constructional Association’s analysis of yesterday’s Statistics Canada building permit report.
In June 2004, the highest number on record, builders rushed to beat regulatory changes. The March 2006 numbers reflect strong market demand.
“These numbers demonstrate that there is plenty of strength in the region’s construction sector, creating more job opportunities and economic growth going forward,” says Keith Sashaw, Vancouver Regional Construction Association president. “The fall in non-residential permits affected the regional numbers this month, but this is to be expected with the volatility of monthly permits. Overall we expect to see growth in both sectors.”
© The Vancouver Province 2006
