Tighter federal mortgage lending regulations have prompted the Canadian Real Estate Association (CREA) to scale back its forecast for homes sales this year.

CREA made the move after sales in August dropped by almost 9 per cent from the same period a year ago.

CREA Chief Economist Gregory Klump tells 660News while the national picture is a little more cloudy, Alberta remains one of the few bright spots.

“The economic prospects in Alberta being brighter than in many other places in Canada, people feel pretty good about the economy going forward — and they have confidence in the economy — that usually shows up in things like major purchases such as a home or a car,” says Klump who adds no one should underestimate the power of consumer confidence here in the west.

“We’re going to see ups and downs in oil prices based on … what the economic outlooks are for the global economy and for the U.S.,” Klump continues. “But I think people are smart enough to see past that.  And we have oil that people are ultimately going to want, and for that reason” (the) “prospects in Alberta” (are) “a little brighter than elsewhere.”  

The real estate board says house sales were down by 5.8 per cent in August compared to July, the largest month-over-month decline since June 2010.

Klump points the finger of blame squarely at Ottawa following a change in mortgage rules in July.

“It’s going to take some time to see what … the broader effects for the housing market are going to be,” he says.  “But what we saw in August with the first full month in the changes in mortgage regulations is a lot of these first time buyers have been removed from the market because they just no longer qualify for a mortgage.”

CREA has cut its forecast for home sales across the country this year and next, and has also lowered its national average price forecast.  But Klump says they expect transactions in Alberta to top the national average and price gains should also be stronger.