Canada joins the list of housing busts

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For the first time in 9 years, year-on-year prices in Canada are down. With the largest province, Ottawa Ontario, in a recession, it is no wonder that house prices have followed suit.

Canadian home prices have started falling, marking the first decline in almost a decade, according to the Canadian Real Estate Association.

The Ottawa-based group said Tuesday that the average sale price in the country’s top 25 markets in June was $341,096. That’s actually down from a year ago when the average sale price was $342,615. It’s the first decline since January, 1999.

“The frenzied pace of sale activity last year has faded, with buyers now better able to shop around before making an offer,” said Gregory Klump, chief economist with CREA. “Price increase are expected to be modest in the second half of 2008, as sales continue easing and new listings remain high.”

I mentioned in an earlier post that the Toronto Condo market was a bubble. The same is certainly true in the Western provinces and in major markets there like Vancouver.

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The average sale price of a home in Calgary was $416,866 in June, down 2% from a year ago. Sales activity in Alberta’s largest city dropped 21.5% from a year ago.

Edmonton’s housing market had just as poor a month. Prices in Edmonton averaged $341,376, a 2.6% drop from a year ago. Edmonton unit sales were down 14.9% from a year ago.

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The downturn in house prices in Canada should come as no surprise given how tied to the U.S. the Canadian economy is. But the slowdowns in Alberta should be a warning sign of the impending fall in oil demand and prices.

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Source
Canadian housing prices fall, National Post, 15 Jul 2008

See other Canadian-related posts at the tag Canada.

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