CREA expects housing activity to improve in 2020

The Canadian Real Estate Association (CREA) expects the housing market in Canada to improve in 2020, with prices rising or accelerating in many parts of the country.

According to CREA, other than the Prairies and Newfoundland/Labrador, the economic factors that drive housing activity remain strong while the national resale market outlook continues to receive support from both population and economic growth.

Consumer confidence in on the rise thanks to low unemployment (other than in oil-producing provinces), and this is helped by the fact the Bank of Canada is not expected to increase interest rates in 2020.

Homebuyers’ access to financing has been buoyed by declining mortgage rates, which includes the Bank of Canada’s benchmark five-year rate.

Another factor that helped spur growth is the launch earlier this year of the Federal Government’s $1.25-billion shared equity program, designed as an incentive for first-time homebuyers.

Home prices are expected to rise given supply-demand issues caused by better than expected national sales in the second half of 2019 and a decrease of new listings. In fact, CREA states that the balance between supply and demand in November 2019 was its lowest since mid-2007.

This could be great news for contractors as potential buyers get frustrated by the intense competition for new homes, and opt to renovate their old space instead.