Sales and prices are on the slide nationwide
Mario Toneguzzi
Province
CALGARY — Canada‘s housing boom has come to an end and that is no more evident than in Alberta — with prices continuing to fall this year by eight to 10 per cent from their peak, says a national real-estate report.
The report released yesterday by TD Economics says “the long-awaited end of the Canadian housing boom has occurred, reflecting more moderate demand and increased supply of properties for sale” and it is a trend that is broadly based “but it has been particularly sharp in some of the markets that had experienced the most dramatic price growth.”
Evidence of the national downturn is evident in year-over-year price growth for existing homes in Canada’s major markets, which fell to only 1.1 per cent in May, down from 8.6 per cent just four months earlier, the report said.
“The combination of significantly higher listings . . . and weaker demand, due to the past erosion in affordability, are leading to declining sales and softer price performance across the country, particularly in the West,” said the report written by Craig Alexander, vice-president and deputy chief economist, and Pascal Gauthier, economist, of the TD Bank Financial Group.
Home prices in the formerly red-hot markets in Calgary and Edmonton performed worse than the slowing national average, falling below levels reached one year ago in April and May.
“Alberta will have further weakness in the near term, as Calgary and Edmonton will likely see prices continue to fall for another three or four quarters, dropping eight per cent to 10 per cent from their peak, after which prices should stabilize and start rising at a low single-digit pace,” the report said.
National sales are likely to continue to decline in the coming quarters and price growth will slip to two per cent on a countrywide average basis in 2008 and rise only to 3.5 per cent in 2009.
Most markets will see low to mid single-digit gains, but Saskatchewan and Manitoba will continue to post double-digit gains in the near term followed by a significant cooling in 2009, “with the risk of a mild price correction in the major cities that have recently experienced extraordinary price growth.”
And while year-to-date sales have fallen by 12.5 per cent, sales are only returning to levels typically experienced in the three years (2004-2006) prior to the 2007 sales boom, the report said.
Nevertheless, “sales are also weaker in other parts of the country, with British Columbia and Ontario sales down by more than 10 per cent.”
© The Vancouver Province 2008