Predicting the future is an imprecise “science,” so most of us take any forecast with a grain of salt. As we all know, any prediction is subject to change, particularly as more and more market information is revealed, and trends continue to emerge. So it came as no surprise when the Canadian Real Estate Association (CREA), the national association that represents licensed brokerages and agents across Canada, announced an update to its 2019 real estate market predictions. The general overview, however, is that the market is looking a lot less vigorous than it did in past CREA predictions. In fact, the national Realtor association expects the overall market to be very similar to what we saw in 2018. There is a silver lining: Sales this summer were a little higher than expected, with a small national increase in sales activity of 0.9%.
An increasing number of economists are forecasting the beginning of a recession in 2019.
CREA predicts national sales in 2019 to rebound slightly by 2.1%, which is still below the average annual levels between 2014 and 2017 (keep in mind, these were exceptional years for Canadian real estate). The national average price is now predicted to go up by 2.7%, led by activity and sales growth in Ontario, with a predicted sales increase of 5.3%, and an increase in prices of 3.3%.
The number of sales in B.C. is expected to drop by 0.4% on a year-over-year basis, although home sales prices are expected to go up by 1.6% — an amount that is slightly lower than the standard consumer inflation rates.
The rise in sales activity in Quebec during 2018 is expected to continue, with a modest increase in sales of 0.2%, and a price increase of 2.9%.
Whether these predictions come true or not, time will tell. Certainly, activity in 2018 benefited greatly from a booming economy, even though the total number of sales were hampered by the mortgage stress test, an increase in interest rates and the political situation with the U.S.
Right now the biggest uncertainty is how the economy will fair in 2019, with an increasing number of economists forecasting the beginning of a recession in 2019.