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Canadian homes sales down 6.8%

Sales of existing homes fell 6.8 per cent to 117,051 units in the first quarter of 2008 compared with the previous quarter, the Canadian Real Estate Association said Tuesday. The figures were the third consecutive quarterly decline since activity peaked in the second quarter last year. Fewer transactions in February and March in Toronto as well as fewer sales in British Columbia helped to drive the figures down. Sales activity in Toronto accounts for almost one fifth of all existing home sales in Canada, according to the association.

It is also important to remember that 2007 was another record year for MLS residential property sales in Canada," said association president Cal Lindberg. "Any comparisons with last year means comparing with a record year. What the statistics indicate is that the residential housing market is easing back towards more historically typical levels."

Not all provinces saw a decline. Seasonally adjusted sales activity set a new quarterly record in Saskatchewan, and quarterly transactions reached their second highest level ever in Newfoundland & Labrador.

In March, around 38,128 properties traded hands via the Multiple Listing Service on a seasonally adjusted basis - a decline of 0.4 per cent from February, the association said. The number of MLS residential new listings hit the highest quarterly level ever in the first quarter. A seasonally adjusted total of 223,405 homes were listed in the first three months of 2008, up 5.5 per cent over the fourth quarter last year.

There were record quarter-over-quarter gains in new listings in Alberta and British Columbia, which offset a quarterly decline in new listings in Toronto.

The CREA_report said that the MLS housing market became more balanced in every province except Saskatchewan. The market in Alberta remained the most balanced in the country, while sellers' markets persisted in Saskatchewan and Manitoba.

"Housing markets are becoming more balanced and price gains are becoming more modest as a result," said chief economist Gregory Klump. "This trend is forecast to continue, as rising mortgage carrying costs and property taxes erode affordability."

The more balanced market was reflected in more modest price gains. The average residential price rose 6.4 per cent year-over-year to $312,583 in the first quarter of 2008. This increase represented the smallest year-over-year advance since the fourth quarter of 2001.

However, in Manitoba and Newfoundland and Labrador, average residential prices posted the biggest year-over-year increase ever in the first quarter of 2008.

"The credit crunch has had limited impact on Canadian mortgage lending to date. Resale housing activity will continue to be supported by rising after-tax incomes, high employment, and declining interest rates," said Klump.

Residential unit sales March 2008 (% change from March 2007):

Source: Canadian Real Estate Association

April 30, 2008 in Canadian Real Estate Market | Permalink

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Comments

Real Estate in Saskatchewan should double within the next couple of years.

Posted by: Real Estate | May 13, 2008 8:00:23 PM

Like I posted previously, housing cycles typical begin to contract when sales volumes start to decrease which is then followed by increasing inventories. If this trend continues, then we should expect to see falling prices sometime in the next 9-12 months.

To those of you who think real estate markets don't follow the same cyclical patterns of other economic markets, you are in for a rude awakening.

People should spend more time educating themselves and less time reading about Paris Hilton and American Idol. Perhaps a little bit of education would go a long way for people to analyze data and make their own conclusions as opposed to simply absorbing the opinion of the mainstream media as their own.

Posted by: Toronto Bear | May 1, 2008 11:32:17 AM

"The credit crunch has had limited impact on Canadian mortgage lending to date. Resale housing activity will continue to be supported by rising after-tax incomes, high employment, and declining interest rates," said Klump.
I can't see any Impact when the prizes are increased for 6.4%, about economy Mr.Klump doesn't know nothing, after-tax income is much lower in Manufacturing and Transportation services
because 1% decrease is nothing when you compared increase the fuel prize and lower volume of bussines.Also in the last four monts unemploment rate in Canada had jumped from 5% to 6% and will going worst in the next quarter to 6.5 %.About interest rates is not problem because 0.5 % less interest can not improve sales when the prize is going up 6.4%. This is Amateurish Report.

Posted by: Mario | Apr 30, 2008 11:00:30 AM

Next Report from Canadian Real Estate Association will be following:
"Sales of existing homes fell 10% per cent in the second quarter of 2008 compared with the previous quarter,BUT The average residential price rose 10% per cent year-over-year to $342,583"
It's a logic market and trend in Canada

Posted by: Mario | Apr 30, 2008 10:00:54 AM

"Sales of existing homes fell 6.8 per cent in the first quarter of 2008 compared with the previous quarter,BUT The average residential price rose 6.4 per cent year-over-year to $312,583"
Report from Canadian Real Estate Association.
No comment,It's a logic market and trend....

Posted by: George | Apr 30, 2008 9:44:09 AM

To my agent from Vancouver,you are obviously blind
and you can't see decline about 23% in BC.IN Every country in the West World including Europe and USA the banks had lowered of the key rates and the housing prizes are down between 5 % and 10 % from last year.World market is different than Canada low demand reflecting low prizes.But Canada is different Market and is only sellers market so you will see next quarter again decline in sales but be positive the prizes will increase again.And what we can expect next year when BOC will increase interest rate be sure again sales will decline more than now but be positive prizes will going up at least 2%.

Posted by: George from Toronto | Apr 30, 2008 9:18:27 AM

I am dealing with a real estate in Vancouver but my numbers are little bit different. After two month of decline I have recorded increase (2%) according to my internal statistic. Maybe the reason is that I was selling quite special kind of estates last month but I think that also widely expected lowering of the key rates positively affected the demand.

Posted by: Vancouver real estate agent | Apr 30, 2008 8:21:58 AM

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