The forecast for the Canadian real estate market in 2009 is very grim according to a resource quoted by PropertyWire. While the real estate troubles are not particularly surprising considering the world real estate and economic downslide, it is interesting to note just how far real estate prices are expected to fall. For more information, read the following article from Property Wire.
Property sales in Canada this year are expected to drop back to 2000 levels before rebounding in 2010, according to a new report from the Canadian Real Estate Association.
The Ottawa-based group, which represents 100 boards across the country, issued a new forecast for 2009 and predicted sales would fall to 360,900. That would be a 16.9 percent decline from 2008. Sales last year fell 17.1 percent from 2007.
"We are caught in a cycle where consumer confidence has been eroded because of job losses and consumer confidence is an essential ingredient for housing sales activity," said Calvin Lindberg, president of CREA.
His group is forecasting a rebound by 2010 and forecasts sales to jump to 9.9 percent, with most of the growth coming in the second half of that year. British Columbia and Alberta are expected to have the strongest rebounds in 2010.
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Prices are also forecast to fall this year before rebounding slightly in 2010. CREA said the average price of home sold in Canada will be $279,400 this year, an 8 percent decline from last year. In 2008, the average sale price in Canada dropped 0.7 percent.
The increase in prices is forecast to be modest next year. CREA says the average sale price of home next year will be $282,400, a 1.1 percent increase from 2009.
"Increasingly cautious homebuyers and mortgage lenders mean that active listings will take longer to sell in 2009 compared to previous years," said Gregory Klump, chief economist with CREA.
"The national housing market is recalibrating due to weak sales activity," he added.
The downturn in the real estate market in Canada is behind the investigation of a number of property brokers. The Real Estate Council of Ontario is currently examining the financial dealings of three real estate brokers in Toronto and the operation of their deposit accounts.
"The slowdown in Toronto’s real estate market may have played some part in these freeze orders. Over the past few years the margins in the real estate brokerage business have been under pressure as new business models emerged that charge agents much lower fees than traditional brokerages," said one expert.
"Brokerages with high overhead costs and thin margins may not be well positioned to handle a slowdown in the real estate market. Real estate sales are down by roughly 50 percent over the past four months which means that revenue for most brokerages is probably down by the same amount," he added.
This article has been reposted from Property Wire. View the article on Property Wire’s international real estate news website here.