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Is the boom winding down?
House resales were down 8% from last January
Resale home activity caught a case of the winter sniffles in January, a further sign Canada's mighty residential real estate market is finally in a slowdown. Last month, seasonally adjusted unit sales declined by 0.4 per cent from the month before and 8 per cent from January, 2007, according to data released Friday by the Canadian Real Estate Association (CREA).
“With the further dip in January, Canadian home sales are now well below year-ago levels, adding further evidence that the great boom is winding down,” said Douglas Porter, deputy chief economist at BMO Nesbitt Burns Inc., in a research note.
Steadily rising home prices have benched potential buyers, particularly in Alberta. In January, unit sales in Calgary dropped by 30.9 per cent from the year before and by 21 per cent in Edmonton. At the same time, new listings in those markets surged by 35.3 per cent and 61.1 per cent, respectively.
Across the country, new listings hit a new record 51,716 units in January, rising 9.3 per cent from the previous month. It was the largest month-over-month increase in seven years, and puts the market into “more balanced” territory than it has been at any other point during that time, according to CREA.
Prices across the country did cool somewhat, with the average price rising 8.6 per cent year-over-year to $325,183. This was the smallest year-over-year price increase since December, 2006, and compares with an increase of 11 per cent for all of last year.
“The overall increase in new listings stemmed mainly from a jump in listings in some of Western Canada's most active markets. Price increases in those markets will be more modest compared to what we saw last year,” Gregory Klump, chief economist at CREA, said in a statement.
Some of the country's weaker markets were in Alberta and parts of Ontario including Toronto, Durham Region and St. Catharines.
Stronger markets included Newfoundland and Labrador, where home sales rose 47.5 per cent from the month before and the average price rose by 17.1 per cent.
Saskatchewan was also strong, with sales in Regina rising by 43.7 per cent while the average price rose 69.1 per cent, and in Saskatoon by 37 per cent with the average price up 36.5 per cent.
February 18, 2008 in Canadian Real Estate Market | Permalink
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Comments
The growth that Canada has experienced in recent years has been truly remarkable. The prices of houses have sky-rocketed and more people are living in Canada today than ever before. However, although this growth has been astounding, it has also been something difficult for many Canadian cities to manage. The demand for houses escalated so dramatically that properties became overpriced and completely beyond the means of many looking for a place of their own. Now, as a possible U.S. recession approaches, the Canadian market is beginning to correct itself. Prices of homes and many other things are once again becoming affordable.
Posted by: Vancouver realtor | Feb 29, 2008 11:34:00 AM
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