CREA (Canadian Real Estate Assoc.) said Wednesday it has reduced the number of resale transactions it expects country wide by nearly 40,000 from it's previous forecast of 527,300.
British Columbia accounted for more than half of the reduction and the rest came from primarily Alberta and Ontario.
CREA now expects 490,600 resale units will be sold nationally this year through the MLS, still up 5.5% from 2009 activities.
Although mortgage rates have gone up and are expected to rise further, the association says the higher cost of borrowing will have a minimal impact on the market this year.
"Interest rates are expected to rise slowly and at a measured pace during a new era of government spending restraint, so home financing will remain within reach for many homebuyers," CREA president Georges Pahud said.
Instead, sharp price increases appera to have been the main factor for the downward revision for British Columbia and Ontario.
"While sales activity is unfolding as expected in Ontario, the decline in affordability in British Columbia impacted sales in the province during the first quarter," the association said.
CREA now expects only 80,000 resales in BC this year, nearly 22,000 fewer than previously anticipated and a decline of 5.9% from 2009, when the province had by far Canada's strongest housing market.
The association's initial 2010 forecast issued in February had projected there would be 101,900 resale transactions in BC this year, which would have been up 19% over last year.
Alberta's 2010 total has been reduced to 55,900 which would be a 2.9% decline from last year, from an initial projection of 63,050.
Ontario's projected number of sales for 2010 has been reduced by 8,300 to 215,400, which would still be up 10% from last year's 195,840.
Housing prices are still expected to set a new record high this year, but the increase is now expected to be just 1.6% over 2009.
The previous forecast had called for prices to rise 5.4% over last year.