Canadian home builders should expect a more difficult time for this year, mainly because of lower sales in the first the two months.
This trend of lower home sales may continue in the coming months, as the Canadian Real Estate Association (CREA) predicted a 7.1% drop in housing sales for the entire year. However, some provinces such as Alberta still present growth opportunities for residential construction, which could lead to higher demand for stainless steel fabrication from Edmonton and other cities.
CREA’s forecast attributed the weaker growth to lower sales in British Columbia and Ontario. High home prices are driven by a lack of properties for sale also turn off potential buyers, while interest rates increase at the same time. The Bank of Canada has raised the overnight rate to 1.25%, which means home buyers will find it harder to pay for mortgage loans.
Despite the expected challenges, CREA expects sales to rebound in the second half of 2018. At this time, the housing market would have already adjusted to these trends. In Alberta, the province has bucked the trend of lower home sales nationwide.
So far this year, existing residential property sales in Alberta increased 9.4%. Housing starts, which is an economic indicator, also rebounded by 20% over the last 12 months. As much as 28,000 housing starts are expected for this year.
Low-interest rates, employment growth and increasing consumer confidence, are some of the reason for the upbeat market performance in the province. The average price for a home in the country is expected to drop 2.3% to $498,100 this year, which could further improve the pace of sales in Alberta.
Home builders should look into Alberta as its haven for new projects, as the province could be the lone star in the country’s residential property market for 2018.