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Canadian home prices drop
MLS data for June shows first decline in nine years.
House prices in Canada had their first monthly year-over-year decline in more than nine years in June, the Canadian Real Estate Association reported today. Gregory Klump, the association's chief economist, says the price decline was the first since January, 1999 and reflects a slumping economy and the huge runup in prices in recent years in Alberta's energy-based economy.
In June, the major market MLS residential average price edged down 0.4 per cent year-over-year to $341,096, says the association as it released its latest Multiple Listing Service statistics.
Klump says the slight decline in average price comparison reflects the impact the surge in average price in Calgary and Edmonton had last year.
The real estate group says the average price in these markets retreated after rising dramatically last year, but has stabilized since March this year in line with a balanced market.
New listings of homes for sale on the Multiple Listing Service® (MLS®) in Canada’s major markets reached record levels in the first half of 2008, while sales activity retreated from the record levels reported in 2007
New MLS® residential listings in Canada’s major markets numbered 332,958 units in the first six months of 2008, up 8.1 per cent from the previous record set in the same period last year. For the third time in as many months, seasonally monthly adjusted new MLS® residential listings topped 50,000 units in June 2008.
More new properties were listed in April, May, and June this year than in any other month on record. This pushed seasonally adjusted new listings to new levels in the second quarter of 2008, up 7.5 per cent from levels the previous quarter. New listings reached record or near-record levels in Toronto, Vancouver, Ottawa, Regina, and Saskatoon. This more than offset a decline in new listings in Edmonton and Calgary, which continue retreating from peaks in March.
By contrast to rising new listings, sales activity in the first half of 2008 was down compared to the same period of 2007, which was a record-setting year. Transactions declined by 13.3 per cent year over year to 169,265 units in the first half of 2008. Seasonally adjusted transactions fell on a month-over-month basis in the first two months of the year, with the February decline being the largest in more than four years. Activity in 2008 subsequently posted four consecutive monthly increases, but remains below where it stood at the end of last year.
New year-to-date sales activity records were set in St. John’s and Thunder Bay in June. In the second quarter, seasonally adjusted activity reached the second highest level on record in Winnipeg, Quebec City, Gatineau, and Saint John. Quarterly transactions also posted their third highest levels in Ottawa, St. John’s, and Thunder Bay, and reached their fourth highest ever level in Montréal.
Over the past six months, easing sales activity and a surge in new listings caused the resale housing market to become considerably more balanced in many major housing markets. Vancouver, Regina, and Saskatoon were the most balanced major markets in June.
"The Canadian real estate market, while cooling, is still much different than the U.S. market with its record low number of foreclosures or defaults" says the President of The Canadian Real Estate Association, Calvin Lindberg. In the United States home prices dropped by 14.1 per cent in the first quarter of the year, according to the Case Shiller national home price index.
"Finance Canada has moved to clamp down on those buyers who may be heavily leveraged in their bid to become home owners" the CREA President added, "and this is not expected to have any major impact on the overall market before the changes go into effect in October."
The major market residential MLS® average price set new records for the first half of 2008, as well as for the second quarter of the year. In the first half of 2008, the MLS® residential average price rose 3.2 per cent year-over-year to $340,390. On a quarterly basis, the average price in Canada’s major markets was $343,235 in the second quarter, up 1.4 per cent from the second quarter of 2007.
However, in June the major market MLS® residential average price edged down 0.4 per cent year over year to $341,096. The slight decline in average price comparison reflects the impact the surge in average price in Calgary and Edmonton had last year. The average price in these markets retreated after rising dramatically last year, but has stabilized since March 2008 in line with a balanced market.
New monthly records for MLS® residential average price were set in a number of major markets in June, including Saskatoon, Kitchener-Waterloo, Thunder Bay, Ottawa, Gatineau, Montréal, Trois-Rivières, Saguenay, Saint John (NB), and St. John’s (NF).
"The resale housing market is more balanced than it was last year in all major urban centres," said CREA Chief Economist Gregory Klump. "The frenzied pace for sales activity last year has faded, with buyers now better able to shop around before making an offer. Price increases are expected to be modest in the second half of 2008, as sales continue easing and new listings remain high."
July 15, 2008 in Canadian Real Estate Market | Permalink
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Comments
The market is stabilisng over all and the prices are going down and yes the market is becomming a buyers market. But don`t forget that it`s still a market and as every market, it is unstable and therefor the prices in GTA may be higher thatn the average. On the other hand, Ottawa and Vancouver are experiencing a price drop and the Richmond area is stabilising too. I believe that this is the development that is awaiting also Toronto.
Jay
Posted by: Vancouver realtor | Jul 17, 2008 4:40:01 AM
MLS data for June shows first decline in nine years!
It's not true.
When I watched on MLS,properties in GTA are still higher with asking price from January/08 year between 7% and 15 %. It's still remaining a good Sellers' market.
"June Market More Balanced?" said TREB President Maureen O’Neill.
I don't think so. Because today 80% of new listings in GTA are more expensive from April and May about 10K- 30K.... Good decline in GTA?
Posted by: | Jul 16, 2008 12:56:43 AM
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