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February 2012

The Market According to Mercer

Summary Points

•The pace of economic growth has slowed with a more pessimistic outlook for the global economy. The Bank of Canada has acknowledged that the Consumer Sector will be driving growth.

•The forward rate curve suggests that the Bank will not be raising rates for some time.

•We are on pace for the second best year on record (again) in 2012, with a forecast of 92,500 sales in 2012. Sales will be driven by affordability and more listings to satisfy pent-up demand. This forecast assumes the current consensus view that economic growth will continue inCanada.

•The average home price in 2012 will come in at $486,000 – 4.5 per cent above 2011. With more supply in the market in 2012, the pace of price growth will moderate.