According to a report from the Canadian Real Estate Association, Alberta will show the biggest year-on-year increase in home sales over the next couple of years. The CREA is predicting MLS sales will increase by 6.8% this year to reach 57,400, and by a further 1.7% next year to 58,400. The average sale price in Alberta is expected to increase annually by 1.4% during 2012 and 2013 to reach $363,200.
The Canada Mortgage and Housing Corporation is also pretty upbeat about Alberta, as it is predicting sales in the province will grow by 2.8% this year, and by 3.5% next year. It expects average sale prices to rise by 2.2% this year, and by 2.4% next year.
Unfortunately the CREA isn't painting quite such a rosy picture for the rest of the country, as it predicts sales growth of just 0.3% this year followed by a decline of 0.3% next year. Nationally they are forecasting the average sale price will decline by 1.1% this year, and will increase by just 0.9% in 2013 to reach $362,300.One of the problems remains the European debt crisis and the threat of a global recession. If these threats can be avoided the CREA's chief economist, Gregory Klump is predicting sales will be supported by continuing low interest rates.
The Finance Minister of Canada, Jim Flaherty is also concerned about the possibility of a housing price correction and rising household debt. He is encouraging Canadians to take care about the amount of debt they build up, and warns that interest rates will have to increase at some point. Flaherty is particularly worried about the overheated condominium market. Some of the larger banks have suggested Ottawa considers lowering the maximum length of mortgages back down to 25 years, and thinks about increasing the minimum down payment.