The Canadian Real Estate Association (CREA) is predicting existing home sales will rise 13.3 per cent this year compared to 2009, it said in a news release Monday.
|Average home price forecast|
|2010 ($)||2011 ($)|
|Prince Edward Island||149,900||153,200|
|Newfoundland and Labrador||222,300||238,900|
The industry association predicted sales of 527,300, which would be a new annual record, up 1.2 per cent from the previous record year of 2007.
CREA expects low interest rates will boost sales in all provinces, led by Ontario and British Columbia, but that the growth in sales would slow over the second half as pent-up demand is met, interest rates rise, and the harmonized sales tax takes effect in Ontario and B.C.
For 2011, the association predicts higher interest rates will slow activity, leading to a decline in sales of 7.1 per cent, to 490,100 homes.
The CREA forecast the average price nationally would climb by 5.4 per cent this year, to a record $337,500, with gains in all provinces, but ease 1.5 per cent in 2011.
CREA chief economist Gregory Klump predicted interest rates will rise slowly this year and next, citing "fiscal restraint, a strong Canadian dollar and a subdued inflation outlook."