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Canadian homes prices down 5.4%

Several pricey markets drag averages down in September

The Canadian Real Estate Association says the falling average sale price nationally is a reflection of a decline in sales in the highest-priced markets, noting that prices are still rising in a majority of markets. The Ottawa-based group, which represents more than 100 boards across the country, said the average sale price of an existing home, sold through the MLS system, fell 5.4 per cent in September to $289,916 from $306,347 a year earlier. But it said prices are actually up in 65 per cent of the boards it represents.

"The recent price declines in the Canadian housing market reflect lower activity in some of Canada's priciest housing markets that had posted large price increases. Price declines in the U.S. reflect a massive oversupply of housing due to soaring foreclosures and overbuilding," said Calvin Lindberg, the president of CREA.

Vancouver, the most expensive market in the country, has had year-over-year sales declines in the 40-per-cent range, and many real estate analysts suggest the results are skewing the national number. Some of the price trends by province included a 7.4-per-cent decline for British Columbia to an average of $412,149, and a five-per-cent fall in Alberta to $342,052.

On the other hand, the average sale price in Saskatchewan was up 23.2 per cent to $229,381, and Newfoundland and Labrador's going rate for housing rose 17.5 per cent to $178,062.

B.C.'s average price was no doubt influenced by a 33.6-per cent-decline in sales in September, compared to a year earlier, to 7,688. In Newfoundland, sales were up 26.2 per cent to 431.

CREA said the supply of new houses reaching the market is also shrinking. It said there were 230,107 new listings in the third quarter on a seasonally adjusted basis, down 3.1 per cent from the previous quarter, which was the highest on record.

Home Sales

September home sales price movements by percentage (from September 2007):

Source: CREA

October 31, 2008 in Canadian Real Estate Market | Permalink


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Protectionist fears waft from U.S.
With a deepening financial crisis and a recession to worry about, Canada probably falls nowhere on the list of concerns for the next president of the United States.

But whether Democrat Barack Obama or Republican John McCain, how the winner handles the financial-market meltdown and worsening economic woes is bound to pose big implications for Canada.

"The agenda of the next president is going to be daunting, to put it mildly," said Roger Gibbins, president of the Canada West Foundation, an Alberta think-tank. "If the American economy remains bad or worsens, then there's a very real risk of a protectionist stance. We may end up being a bystander victim."

The U. S. Congress, regardless of its political stripe, has a history of putting up trade barriers in tough economic times.

"Trying to protect American interests can get folded into an energy-security and a protectionist sentiment," said Mr. Gibbins. "I probably sound overly alarmist, but these policy files are hugely important to our own economic recovery, and how they're handled in the United States is going to be terribly important."




Great Depression in Canada was worst than in US

Canada was hit hard by the Great Depression. Between 1929 and 1933, the gross national product dropped 40% (compared to 37% in the US). Unemployment reached 27% at the depth of the Depression in 1933.
Families saw most or all of their assets disappear, and their debts become heavier as prices fell. Canadian exports shrank by 50% from 1929 to 1933.


Posted by: | Nov 2, 2008 12:53:47 AM

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