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 ($) 2011 ($)
Canada 337,500 332,400 
British Columbia 485,500 476,600
Alberta 357,300 361,700
Saskatchewan 242,500 248,500
Manitoba 210,300 215,300
Ontario 332,700 326,000
Québec 240,500 249,100
New Brunswick 159,400 164,200
Nova Scotia 200,900 204,700 
Prince Edward Island 149,900 153,200 
Newfoundland and Labrador 222,300 238,900
Source: CREA    

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."