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This article was published 6/3/2012 (3041 days ago), so information in it may no longer be current.
RESALE-home prices in Manitoba will increase at the fastest pace in the country over the next two years, while sales across Canada will also be better than previously thought, according to the latest forecast from the Canadian Real Estate Association.
CREA said Monday it expects the average selling price of a home sold through the local Multiple Listing Service (MLS) to climb by 3.5 per cent to $242,700 this year and by a further three per cent to $250,000 in 2013.
While that's slower than the 5.9 per cent growth Manitoba experienced in 2011, it will still easily outpace Canada's price performance over the same period, CREA said. It's predicting the national average selling price will decline by 1.1 per cent to $359,100 this year, before rebounding 0.9 per cent to $362,300 in 2013.
While that's a downgrade from last November, when CREA was predicting the national average price would hold steady this year, the association has upgraded its forecast for unit sales for this year. Instead of a 0.5 per cent decline, it's now forecasting Canadian MLS sales will climb by 0.3 per cent to 458,800 units this year, before retreating by the same amount in 2013.
CREA is also predicting Manitoba will outperform Canada in terms of unit-sales increases over the next two years. It predicts sales here will climb by 2.2 per cent to 14,250 this year and by another 1.1 per cent to 14,400 units in 2013.
CREA chief economist Gregory Klump said Manitoba's housing market is expected to hold up better than most because a healthy economic outlook for the province and low interest rates have many Manitobans feeling good about purchasing a home.
He said the main reason selling prices are escalating at a faster pace here than anywhere else is because the supply of available homes is tighter than anywhere else in the country.
"And that's expected to continue," he said.
CREA's latest forecast for Manitoba is in line with the latest forecast from Canada Mortgage and Housing Corp. CMHC predicted last month MLS sales here will climb by two per cent and the average selling price by three per cent in each of the next two years.
CREA's revisions to its national housing forecast come as central banks in Canada and the United States keep their key lending rates low to counter the economic drag caused by the European debt crisis.
"Risks to the Canadian economic outlook remain elevated owing to the European sovereign debt quagmire, but the continuation of low interest rates is the silver lining," Klump said. "So long as the European debt crisis is contained and a global economic recession avoided, low interest rates will support Canadian home sales and prices."
CIBC economist Benjamin Tal said the new CREA forecast for Canada's housing market is much more in line with what he is projecting. If anything, it's "a best-case scenario" forecast, he said, with his bias being toward more significant price declines.
"This is basically a stagnating housing market. This is not a housing market that is going to be on fire. This is a housing market that you'll see activity moderating and prices actually going down."
-- staff / CP
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