Royal LePage Reports Housing Sales & Prices Drop

During the fourth quarter of 2008, Canada's real estate market posted a decline in both unit sales and house prices, Royal LePage states.

A Royal LePage Real Estate Services’ House Price Survey shows during the fourth quarter of 2008, Canada's real estate market posted a decline in both unit sales and house prices. The combination of a global economy in recession and shrinking employment figures did much to dampen consumer confidence, diminish home sales and cause house prices to drop. Of the housing types surveyed, the average price of detached bungalows dipped by 4.8 per cent to $319,640, followed by standard condominiums, which decreased by 5.2 per cent to $233,230, year-over-year. The average price of standard two-storey properties fell by 6.3 per cent to $376,140, year-over-year. The national average house prices decreased, however, price trends varied dramatically across regional real estate markets. Bolstered by strong local economies, the housing markets in Regina and St. John's posted double-digit year-over-year price appreciations, while the larger cities that have seen the greatest increase in prices this decade, including Toronto, Edmonton, Calgary and Vancouver, recorded declining house prices. A recent poll commissioned by Royal LePage found that almost half (49%) of Canadians surveyed agree that the economic stimulus measures anticipated as part of tomorrow’s Canadian federal budget announcement will have a positive impact on Canada’s real estate market. As well, political actions taking place south of the border are likely to buoy the country’s economic conditions, as the poll found that 82 per cent of Canadians agree that the inauguration of Barack Obama will have a positive impact on consumer confidence in Canada. “The steady flow of universally dire news that Canadian consumers faced in the fourth quarter has gradually given way to a mixed diet of positive and negative economic indicators,” said Phil Soper, president and chief executive, Royal LePage Real Estate Services. “This is clearly having some impact on consumer confidence as nearly half of all Canadians believe the steps the government is taking to stimulate the economy in tomorrow’s budget will positively impact the country’s real estate market.” Added Soper: “During the fourth quarter, housing markets go through a typical seasonal slowdown, and 2008 was no different. Earlier in 2008, as the country began to experience the anticipated adjustment in home sales, news that Canada would be hit hard by the rapidly expanding global recession caused home sales to grind to a halt in the last quarter. In many regions of the country, those that did decide to sell their homes were faced with a limited number of buyers who could be broadly classified as bargain hunters. What would have been a normal cyclical correction gave way to a sharp reset in housing values.”