CREA says lower sales forecast will cost economy $1B in lost economic activity
TORONTO — The Canadian Real Estate Association said Thursday its lower home sales forecast will cost the economy $1 billion next year — as the impact of tighter mortgage regulations that come into effect New Year’s Day take a toll on the sector.
CREA said in an updated projection Thursday the banking regulator’s revised mortgage underwriting guidelines, which include a stress test for uninsured mortgages, will reduce sales activity across the country, particularly in and around Toronto and Vancouver.
The association now forecasts a 5.3 per cent drop in national sales to 486,600 units next year. That new estimate shaves about 8,500 sales from its previous 2018 forecast.
Citing research by Altus Group, CREA said this forecast decline of more than 27,00 sales from 2017 to 2018 translates into a decrease of $1.1 billion in economic activity and nearly 12,000 fewer jobs, although it did not provide more detail on how or which jobs will be affected.