B.C. Premier Christy Clark has put the province’s real-estate industry under government oversight, declaring the industry’s self-regulating body has failed to protect the public from cut-throat and illegal practices and has lost the public’s confidence in its ability to police itself.

The announcement comes a day after an independent advisory panel issued a report that included 28 recommendations for how the Real Estate Council of British Columbia should beef up its oversight ability to adjust to a market fuelled by speculation.

“The point of regulation is to protect people, it is to protect consumers,” Ms. Clark said. “The real-estate sector has had 10 years to get it right on self-regulation, and they haven’t.”

The panel was formed after a Globe and Mail investigation revealed that some realtors in Vancouver’s booming market put their financial interests above those of their clients, and the B.C. Real Estate Council did nothing to stop them.

But Ms. Clark’s government, which faces an election next year, concluded the improvements recommended by the panel would not be enough. The decision to bring realtors under government oversight makes B.C. an outlier: The real-estate industries in most other provinces, including Ontario, Quebec and Alberta, regulate themselves.

The Canadian Real Estate Association said it is reviewing the report. In Ontario, where Toronto’s housing market is also raising concerns about speculation and soaring prices, a senior government official said the province is “looking at many aspects of the real estate sector especially when it comes to the importance of affordability of home ownership,” but would not commit to any moves toward self-regulation.

Ms. Clark’s decision came as a surprise to the B.C. industry, but the outgoing superintendent of real estate, who chaired the advisory panel, said it should not have.

“It usually takes industry a long time to get self-regulation, so they are not going to be happy with it being taken away – but it wasn’t working,” Carolyn Rogers, who is leaving for a new job in Ottawa regulating the banking sector, told The Globe.

“It’s a cautionary tale – because there are other industries out there that self-regulate. It is a privilege, not a right.”

The Premier said her government would adopt all 28 recommendations the advisory group made to improve consumer protection. Those include more educational requirements and screening for aspiring realtors, hefty fines for wrongdoing – a maximum of $250,000 for agents and $500,000 for brokerages – improved consumer education, and more transparency and accountability.

Ms. Clark said the province will appoint a new, dedicated superintendent of real estate who will have authority over the council’s regulations and to implement the report’s recommendations. Currently, the superintendent’s job is part of the duties of the head of Financial Institutions Commission (FICOM). Those duties also include oversight of the pension and financial services sector.

Specifically, Ms. Clark confirmed the province will put an end to “dual agency” – where one realtor represents both buyer and seller – because of the inherent conflict of interest.

The panel’s report, and the Premier’s announcement, followed stories in The Globe that some realtors and brokerage firms were profiting from shadow flipping and other questionable practices. The panel’s report on Tuesday found the Real Estate Council is dominated by industry members who took disciplinary action reluctantly and tentatively.

B.C. real-estate agents have been self-regulated since 2005. The impact of skyrocketing prices and speculation in the housing market are expected to be huge issues in the election campaign. While realtors earn increasingly fat commissions in the Vancouver market, the government is under great pressure to curb any activity that makes buying or selling a home more perilous.

The Liberals have sparred with the City of Vancouver over ways to make housing more affordable, with the province reluctant to intervene in a way that could make things more affordable for buyers, but also cost homeowners some of the equity in their properties.

The BC NDP noted that ending self-regulation will do nothing to make housing in the province more affordable. The Opposition called on the province to create a task force of police, Crown prosecutors and auditors to investigate and prosecute fraud and money laundering.

The Real Estate Council of B.C. posted a brief statement after the Premier’s announcement: “The Council is ready, willing, and able to work with Government to implement the steps announced today,” it said.

Dan Morrison, president of the Real Estate Board of Greater Vancouver told The Globe he expects that most realtors will understand the government’s decision.

“I was a bit surprised – but we will deal with it and move on,” he said. “In hindsight, we all probably should have made more noise to improve our industry faster, and it didn’t happen. But we will just keep working to make it better.”

Don MacKay, a managing broker in Vancouver with 36 years of experience, said his industry got what it deserved.

“We couldn’t handle self-regulation. We should be able to self-regulate, but we couldn’t. I think we were not willing to have more people involved in our business,” Mr. MacKay said.

“Weeding out the bad apples should be pretty easy. All they have to say is, ‘I am sorry, we don’t want you in the business,’ but the council always seemed so reluctant to do that.”

Kathy Tomlinson The Globe & Mail

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The B.C. real estate industry’s self-regulating body should become the sole agency responsible for enforcing far stricter rules, including dramatically higher penalties of up to $250,000 for unscrupulous agents, says a damning report from an independent panel created after Globe and Mail investigations into the Vancouver region’s housing market.
The panel’s report, released Tuesday, calls for a series of new rules designed to punish shady real estate agents and ensure they don’t profit from taking advantage of consumers. It also says agents should no longer be allowed to engage in dual agency, also known as “double ending,” in which a single real estate agent represents both the seller and the buyer. The practice has been criticized heavily for its inherent conflict of interest.

The report includes a number of recommendations to strengthen investigations by the self-governing Real Estate Council of B.C., as well as ensuring the council becomes the single body in charge of investigating misconduct, rather than also permitting private local real estate boards to dish out their own punishment. Those boards wield too much power over complaints, which confuses the public, the panel said.

In all, the report includes 28 recommendations, and the real estate council was quick to say it accepts all of them.

B.C. real estate reform: Everything you need to know

Carolyn Rogers, B.C.’s superintendent of real estate and leader of the panel, said the recommendations will help the council adjust to the "gold rush" environment of B.C.'s frothy market.

"The regulatory regime for real estate services was designed for people who are buying and selling homes, not people who are buying and selling investments," Ms. Rogers said. "What’s going on in British Columbia right now is that houses are no longer just homes, they are trading, essentially, as investments and that puts pressure on a regime that was never developed for that."

But the panel’s recommendations would continue to place the task of regulating real estate agents with the industry itself, and the report acknowledges that even strengthened regulations would likely have no impact on the “extraordinary” increase in housing prices. The report does, however, recommend that half of the council’s members come from outside the industry, up from just three of the council’s 17 seats.

The real estate council appointed the panel earlier this year following an investigation by The Globe and Mail into the controversial practice of “shadow flipping,” a form of contract assignment that the provincial government has since sought to control. The province demanded the council strengthen its regulation of the industry, warning the province was prepared to step in.

Vancouver MLA David Eby, the Opposition NDP’s housing critic, said he was surprised the panel was able to uncover such “significant and wide-ranging” problems with the regulator in a matter of 15 weeks and without visiting individual brokerages or performing any financial audits.

“This is a warning that real estate agents are in danger of losing self-regulation,” Mr. Eby said. “Frankly, reading the report, I can’t understand why the recommendation wasn’t that they should lose self-regulation entirely. ... There are a lot of hard-working realtors out there whose reputations have been profoundly affected by the failures of the regulator that they fund, that they trusted to do a good job.”

The panel’s report includes a recommendation that individual real estate agents face maximum penalties of $250,000 – far higher than the $10,000 maximum fine currently in place. For brokerages, the maximum should be set at $500,000, the report says.

Ms. Rogers said a low maximum penalty sets the bar for everyone.

“When your high end is low, it pushes all your penalties low,” said Ms. Rogers.

She also said the "gate needs to be tighter" when it comes to handing out licences. The report includes recommendations to increase education for aspiring realtors, particularly ethics training, as well as expanded education for existing agents.

The report also calls for rules to ensure real estate agents can’t keep the profits from an illicit sale, which would instead be returned to consumers who are victimized.

The report says its recommendations will require action from both the council and the provincial government.

“Through this co-ordinated effort, the independent advisory group believes that public trust and confidence in the regulation of real estate licensee conduct in British Columbia can be restored,” the report says.

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Major condo developers in Vancouver are shutting out average buyers by selling their most affordable new units privately – to clients of select realtors and “family and friends” – before their advertised sale dates, The Globe and Mail has learned.

The typical sales contracts also allow those insiders to legally flip the units under construction (known as presale) before closing as long as the developer gets a cut from that transaction. Like shadow flipping with houses, flips of presale condos have been controversial in Vancouver. When supply is scarce and prices are escalating, flipping leaves buyers who want units to live in feeling ripped off or shut out.

Several realtors told The Globe deals with insiders are widespread and quietly encouraged by developers. In Vancouver’s wildly expensive market, it is yet another obstacle for people who feel the deck is stacked against them.

Mike Yeung would like to sell his small condo and buy a new one, but said he has encountered nothing but frustration. He said he worries some developers and realtors are withholding inventory from the public to drive up prices and profits.

“At two presale events, I was there in person,” Mr. Yeung said. “Each time, I was informed that all the studio and all one-bedroom condos were already sold out … to the developer’s family and friends.”

Eager buyers camp out in lineups for hours or days before the sales events. Thousands also sign up online to get “VIP” access, only to find out on opening day they had no chance. Several have said they were then invited to buy something more expensive.

“It’s shady and not forthright,” Mr. Yeung said. “It’s a bait and switch – to get you in the door.”

Michelle Ly said she recently tried to buy into several developments.

“Everything in the one-bedroom or one-bedroom-and-den range was gone well before the official presale started,” she said.

“It’s super misleading and it wastes my time. My realtor and I would spend weeks trying to get information out of the developer, signing up for all the newsletters and touching base with their marketing people every other week. I felt bad for people waiting in line for days.”

Two developments were recently promoted by Rennie Marketing Systems, owned by Vancouver’s most politically connected condo marketer, Bob Rennie, an outspoken advocate for increasing supply to cool the market.

Realtor Steve Saretsky contacted Rennie staff recently and said he was told most of the units in The Ellsworth, a new low-rise building in East Vancouver, have already gone to family and friends of the developer. When sales opened Monday at 8X on the Park, also marketed by Rennie, Mr. Saretsky said all the studio and one-bedroom units had been sold privately.

“I think we are being deceived,” he said. “I think it’s giving local people a false hope – that if we keep building and building and building, it’s going to help them to find a home.”

Mr. Rennie said developers advertise to the public as a sort of fallback policy. If the insiders who get first dibs do not buy enough units, they can sell what is left to the next tier of interested buyers.

“Nobody knows whether the person saying they want the studio will take the studio,” Mr. Rennie said.

Mr. Rennie said 3,500 people expressed interest in just 89 units at The Ellsworth, including the realtors and other insiders. As a result of The Globe’s inquiries, he said he now thinks all would-be-buyers should be told what they are up against.

“From talking this through, I think once you get to a certain level of registrants, we should tell people,” Mr. Rennie said. “I am going to suggest that [to developer-clients].”

Developer Magnum Projects, owned by George Wong, promoted its units in recent e-mails by telling the public, “You are eligible for our jump-the-queue program, allowing priority preview, best selection, and prelaunch pricing.” Interested buyers who signed up later received another e-mail saying: “Studios and 1 bedrooms have been spoken for by the stakeholders, family and friends involved in this development.”

The company did not reply to The Globe’s requests for comment.

A spokesperson for Cressey, which built Kings Crossing in Burnaby, confirmed every one of the units in the first tower was sold privately to clients of select realtors, despite promotions to the public beforehand.

Mr. Saretsky and other agents said many buyers with exclusive access are speculators with no intention of living in the units. The contracts usually stipulate if the property is flipped within a set period, the developer takes a cut. Developers put that provision in their contracts several years ago to prevent speculators from flipping new condos and keeping all the profits.

For example, Mr. Saretsky said, one developer he is familiar with takes a cut of 5 per cent of the original sales price. On a condo that costs $750,000 – a typical price for one-bedroom units in luxury buildings – a flip would earn that builder an extra $37,500 without taking any risk, because the property is no longer its financial responsibility.

These types of flips are done by contract assignment, where the original buyer sells the contract to another buyer before closing. B.C. has brought in new rules that limit the practice for single-family homes, but condo presales are exempt.

Toronto realtor Andrew la Fleur said condos are selling out to insiders in that hot market, too. He said he is one of the few agents whose clients get first crack at properties before the public. He estimates 95 per cent to 100 per cent of new condos are sold to insiders that way.

“I think the public is just unfortunately misinformed or uneducated,” Mr. la Fleur said. “Those of us in the industry can see this coming a mile away and we know how to get our clients in at an opportune time.”

However, he said he does not think most units in Toronto will be flipped, because condo prices are not increasing in that city like they are in Vancouver.

Kathy Tomlinson - Globe & Mail

Prime Minister Justin Trudeau says overseas money from Asia is “obviously” playing a role in Vancouver’s increasingly out-of-control housing market.

But, during his two-day visit to Vancouver, he said he doesn’t want Ottawa to take any action that could make things worse, possibly by hurting other regions that benefit from foreign investment.

During an interview with CBC Radio, Mr. Trudeau said “obviously overseas money coming in is playing a role” in the region’s affordability challenges, which have seen housing prices soar by more than 30 per cent in some neighbourhoods in the past year.

Mr. Trudeau was in Vancouver for announcements and meetings related to transit funding, the innovation economy and housing.

He acknowledged that there’s a crisis in the local housing market and said he’s well aware of the anxiety that is producing because of what he hears from friends and acquaintances he has in the city where he once lived.

Last month, B.C. Premier Christy Clark urged Mr. Trudeau’s government to boost efforts to track real estate transactions because British Columbians want to ensure everyone is paying their fair share of taxes. Her comments came as the B.C. government launched an initiative to collect citizenship data on home buyers in response to concerns over how foreign ownership might be affecting real-estate prices.

Mr. Trudeau offered few specifics about what Ottawa might do, though he didn’t rule out the option of measures enacted in Australia to limit allowing foreign buyers to buy new properties.

“Those are certainly the kind of best practices we will be looking at and contrasting and seeing what can apply here and work here,” he said when asked about the measures.

“It’s very dangerous to try and apply a made-in-somewhere-else solution, exactly as is, to Canada. But we can certainly learn from successes and challenges various jurisdictions have.”

His statement was in contrast to statements during the past couple of years by the B.C. government and local real-estate organizations, which have played down the impact of foreign money.

But he echoed their caution in saying that “levers we use here in Vancouver and perhaps Toronto could have extremely negative impacts on housing markets in Calgary or Montreal or Halifax.”

He was also concerned, as has been Ms. Clark, about eroding the equity of local homeowners.

Friday, the Prime Minister was bombarded with information and suggestions at a roundtable where his staff had gathered more than two dozen people with expertise in housing and real estate.

Mr. Trudeau said he wanted feedback from meeting participants, including, “where do you think I should be nudging the provincial government and the municipal governments to take direct action.” He did not elaborate.

Those attending included developers like Ian Gillespie and David Podmore, academics like Tsur Somerville and David Ley from UBC, non-profit housing providers and tax specialists.

Developers focused on the problems with supply: cities taking too long to process development applications and charging high fees that add to the high price of housing.

Academics focused on the problems with demand: the influx of foreign investors who were buying houses as investments and taking advantage of Canadian social services and the capital-gains exemption on personal residences.

As well, people like Mr. Somerville argued that Canada shouldn’t be giving people citizenship just because they have a lot of money.

“On a long-term basis, there are no grounds to give immigration benefits to people with wealth,” he said.

And low-cost housing providers asked the Prime Minister to help the homeless and poor by reinstating coherent federal programs for subsidized housing.

Their voices “kind of got lost,” amid the developers and academics talking about taxes, foreign money and supply, said Janice Abbott, CEO of Atira Women’s Resource Society.

She and Kishone Roy, the CEO of the B.C. Non-Profit Housing Association, and others told Mr. Trudeau the federal government needs to get back into social housing. The federal Liberals ended social-housing programs in 1994, when then-finance minister Paul Martin was downsizing government.

“Subsidized housing requires a subsidy,” said Ms. Abbott.

Those at the meeting, which was closed to the public and media, said Mr. Trudeau suggested he was willing to make Ottawa the “heavy” in developing solutions, which might mean something like tying transit dollars to rezoning along transit lines.

Vancouver Mayor Gregor Robertson, after an event with Mr. Trudeau, said the most effective actions on the file need to happen at the B.C. government level – although he has criticized the province for a lack of action.

“They control the real estate industry here, regulate it and they have tools that can be effective in dealing with the market and the affordability challenges.”

He said the federal government could best help with supporting rental housing, social housing and co-ops after past governments have retreated from that area.

The mayor acknowledged that change will take quite some time to take effect. “It’s going to take some years to turn the corner on affordability,” he said.

Frances Bula & Ian Bailey - The Globe & Mail

The vacancy rate for seniors’ residences decreased modestly over the past year, reaching 7.4 per cent in 2016, compared to 8.1 per cent in 2015, according to the Seniors’ Housing Report released by Canada Mortgage and Housing Corporation.

Our survey makes the distinction between two types of spaces: standard and non-standard spaces. Standard spaces are those occupied by a resident paying market rent and who does not receive 1.5 or more hours of care per day. A non-standard space is one in which the residents are receiving at least 1.5 hours of care per day, spaces being used for respite and non-market spaces.

Report Highlights

• The survey found that 234,989 seniors lived in the 2,812 residences surveyed.
• Vacancy rates for all spaces varied across the country, from a high of 12.7% in Newfoundland and Labrador to a low of 2.7% in Manitoba. The national average was 7.4%.
• Vacancy rates for all spaces in Newfoundland and Labrador (12.7%), Ontario (10.7%), Saskatchewan (9.2%) and Alberta (7.9%) were greater than the national average of 7.4%.
• Vacancy rates of all spaces in New Brunswick (7.3%), Nova Scotia (7.3%), Quebec (6.6%), Prince Edward Island (6.5%), British Columbia (4.2%) and Manitoba (2.7%) were below the national average.
• The average rent for bachelor units and private rooms (where at least one meal is included in the rent) rose 5% over the last year, from $2,107 to $2,210 per month.  Among the provinces, Quebec posted the lowest average rents ($1,527) while Ontario posted the highest average rents ($2,978).
• The increase in the number of senior residents (4.5%) over the year outpaced the increase in the number of available spaces (3.6%), leading to a decrease in the vacancy rate and upward pressure on rent.

In its latest quarterly economic forecast, TD Bank said that while housing investment currently remains strong, "the party will come to an end."

TD pointed out that the Canadian housing situation is one of three stories: red hot Toronto and Vancouver; weak Alberta; and the rest of the country somewhere in-between with little or no growth in house prices.

 Exactly when that housing market correction will happen remains difficult to predict, economists at the bank said.

In the second half of this year, resale activity and price growth are expected to cool as borrowing costs rise and "stretched affordability" put a crimp in both domestic and foreign housing demand.

"However, barring significant new government regulatory measures to curb housing market speculation later this year, more concrete signs of a housing market slowdown are unlikely to be seen until 2017," TD said. "Even then, there tends to be a lag before weaker resale demand translates into a moderation in building activity."

The note of caution on housing is part of the bank's broader outlook for the Canadian economy, which started the year "with a bang" but is expected to pull back in the quarter that wraps up at the end of June.

The impact of the Fort McMurray wildfire, which dented oilsands production, means the national economy is now expected to grow by 1.3 per for the year, TD said. Back in March, the bank had forecast overall growth for the year of 1.9 per cent.

The Fort Mac fire also served to exacerbate the economic gap between Alberta and the robust economies of B.C. and Ontario. However, TD sees Alberta eventually bouncing back.

The British Columbia Real Estate Association (BCREA) reports that a record 13,458 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in May, up 32.3 per cent from the same month last year. Home sales last month exceeded April’s record of 12,969 units. Total sales dollar volume was $9.72 billion in May, up 51.1 per cent compared to the previous year. The average MLS® residential price in the province was up 14.2 per cent year-over-year, to $722,146.

“Record housing demand and dwindling inventories are continuing to push home prices higher in most BC regions,” said Cameron Muir, BCREA Chief Economist. “Total active residential listings across the province are nearly 30 per cent lower than twelve months ago.”

“New home construction activity is at a near record pace in the province,” added Muir. In the Metro Vancouver market, a record number of homes are now under construction. “Once the current crop of homes are ready for occupancy there will likely be more selection for home buyers and less upward pressure on home prices.”

Year-to-date, BC residential sales dollar volume increased 62 per cent to $41 billion, when compared with the same period in 2015. Residential unit sales climbed by 35.2 per cent to 54,455 units, while the average MLS® residential price was up 19 per cent to $752,105.

The Canadian economy is making progress in adjusting to low oil prices and recovering from the global financial crisis, Bank of Canada Governor Stephen S. Poloz said today.

In a speech to the Yukon Chamber of Commerce, Governor Poloz gave a progress report for the economy since the Bank’s last forecast in April. He reviewed the outlook in light of key risks the Bank had identified earlier, as well as the impact of the wildfires in Alberta that led to the evacuation of Fort McMurray and affected oil sands production.

While the energy industry continues to struggle, there are signs of strength in non-energy exports, even though the data have been volatile in recent months, Governor Poloz said. The past depreciation of the Canadian dollar is supporting exports, including tourism, the Governor added. “Several categories are encouraging,” he said. “Many export sectors are operating near their capacity limits, which augurs well for future investment and job creation.”

Governor Poloz also said Canadian households are remaining resilient, particularly outside resource-producing areas. Low interest rates and a solid job market have helped sustain consumer spending. “Data from the first quarter show that consumption, including big-ticket items such as motor vehicle sales and housing, has remained strong,” he said.

The Governor also elaborated on the Bank’s estimate of the economic effect of the devastating Alberta wildfires, which saw almost 90,000 people evacuated from Fort McMurray. With residents returning and some companies moving to restart production, the Bank now estimates the wildfires will reduce annualized growth in the second quarter by about 1.00 to 1.25 percentage points. This will be followed by a sizable rebound due to the restoration of oil output and the beginning of reconstruction efforts. Such a growth profile could yield average growth over the two quarters quite close to that set out in the Bank’s forecast in April, the Governor said.

Both domestic and external risks remain. “Continued patience is required, but we have the right to be optimistic,” the Governor said. “There is a resilience and flexibility among Canadians that gives me confidence that we will get through these adjustments and our economy will return to natural, self-sustaining growth.”

The Canadian Real Estate Association (CREA) has updated its forecast for home sales activity via the Multiple Listing Service^® (MLS^®) Systems of Canadian real estate Boards and Associations in 2016 and 2017.

Canadian resale housing market trends that defined 2015 have intensified. National sales activity and average prices reached new heights in the first half of 2016 amid a growing supply shortage of single family homes in British Columbia and Ontario, particularly in B.C.’s Lower Mainland as well as in and around the Greater Toronto Area (GTA).

Price gains in these regions stand in contrast to declines in provinces where economic and housing market prospects are closely tied to the outlook for the oil patch and other natural resource industries. Elsewhere, home prices are growing modestly, such as in Ottawa or Montreal.

Activity should begin to rebalance away from B.C. and Ontario, as supply shortages put upward pressure on home prices and constrain transactions even as housing demand remains strong in these provinces and interest rates remain low. Accordingly, sales activity over the second half of the year is expected to ease in B.C., Ontario and on a national basis.

Sales in Alberta, Saskatchewan and Newfoundland & Labrador are expected to struggle to regain traction this year, resulting in continuing softness for home prices. In most other provinces, home sales activity and average prices should improve as their economies strengthen and interest rates remain low.

Nationally, sales activity is forecast to rise by 6.1 per cent to 536,400 units in 2016. This would represent a new annual record, but remain below the peak reached in the 2007 after adjusting for population growth.

British Columbia is forecast to post the largest annual increase in activity (+20.0 per cent) this year, while Alberta is expected the record the largest annual decline in activity (-11.5 per cent). Although housing demand remains strong among many housing markets in Ontario, a lack of supply is projected to constrain the increase in sales activity (+5.2 per cent) this year.

Elsewhere, sales are forecast to rise in Manitoba (+7.1 per cent), Quebec (+5.1 per cent) and Nova Scotia (+5.8 per cent), reflecting anticipated economic improvements in these provinces. In New Brunswick, strong home sales toward the end of last year and a weak start to 2016 is projected to result in a small annual decline in activity this year despite an anticipated improvement in its economic prospects.

In Saskatchewan and Newfoundland & Labrador, where housing market prospects are tied to the outlook for natural resource prices, annual sales activity is forecast to ease by four per cent and one per cent respectively this year.

Prices have continued to push higher in British Columbia and Ontario and sales in these expensive real estate markets have recently hit record highs. Accordingly, CREA’s forecast for the national average price has been revised upward to $490,700 in 2016, representing an annual increase of 10.8 per cent.

Highlighting how provincial sales activity affects the national average price, British Columbia is the only province where the average home price is forecast to climb faster (+13.5 per cent) than the national average in 2016. Ontario’s average price is forecast to rise roughly in line with the national increase.

Elsewhere, average prices in 2016 are forecast to rise by 1.4 per cent in Manitoba, 1.1 per cent in Quebec, 1.4 per cent in New Brunswick, and 0.2 per cent in Nova Scotia. Reflecting recent housing market strength in Prince Edward Island, its average price is forecast to advance by 4.5 per cent in 2016.

The forecast for Alberta’s average price has been revised upward and is now projected to eke out a small gain (+0.6 per cent) this year as the province’s supply of listings continues to be drawn down by sales activity. By contrast, average price is expected to ease in Saskatchewan (-1.4 per cent) and record a marked decline in Newfoundland & Labrador (-8.0 per cent).

In 2017, national sales are forecast to number 537,500 units, which is virtually unchanged (+0.2 per cent) from the forecast for sales this year. Activity in B.C. and Ontario is anticipated to remain strong but unable to match records set this year due to a combination of deteriorating affordability and a lack of supply.

Meanwhile, consumer confidence should begin to strengthen and begin drawing homebuyers off the sidelines in Alberta and Saskatchewan as oil prices improve and their economic prospects strengthen. This should contribute to a modest rebound in sales activity for these provinces in 2017.

British Columbia is projected to post an annual decline of 2.3 per cent in home sales in 2017, while annual sales in Ontario are forecast to edge back by 0.6 per cent in 2017.

By contrast, sales activity is forecast to continue rising in Manitoba, Quebec and Nova Scotia next year, reflecting further anticipated economic improvement in these provinces. Meanwhile, sales in Prince Edward Island are expected to remain near on par with record levels forecast for 2016, as the province’s economy continues to benefit from a lower Canadian dollar.

The national average price is forecast to remain stable (+0.1 per cent or +$400) to $491,100 next year, with modest price gains near or below inflation in most provinces.

Slower national average price growth in 2017 primarily reflects the effect of a projected slowdown in sales activity in British Columbia and Ontario. In these two provinces, luxury sales activity is anticipated to recede from current record levels, resulting in a decline in their share of total sales activity. An ample supply of listings relative to demand will continue to keep price gains in check in other provinces, although inventories have begun to shrink in provinces where supply had been elevated in recent years.