But steadying trend may be on the horizon, strategist says
Province
TD Securities strategist Ian Pollick says ‘the lack of supply coupled with falling prices will eventually create a more stable price environment.’ Photograph by: Adrian Lam, Times Colonist, Canwest News Service
Vancouver and Victoria posted year-over-year declines in new housing prices in December, marking their third-consecutive month of erosion.
Prices in Vancouver dropped 2.3 per cent from a year earlier, while those in Victoria fell 2.9 per cent, Statistics Canada said yesterday.
Nationally, the selling price of new homes fell by 0.1 per cent between November and December, the third-consecutive monthly slide, StatsCan said.
On a year-over-year basis, the new-housing price index increased by 0.4 per cent in December, a slower pace than the 0.7-per-cent increase recorded in November.
“On balance, while this report was slightly stronger than the market consensus, it is indicative of a cooling housing market,” said Ian Pollick, an economics strategist with TD Securities.
“It is universally expected that Canadian home prices will continue to retreat in the foreseeable future, though there is a silver lining here.
“We know that housing starts declined by 9.3 per cent year-over-year, suggesting a reduced amount of new inventory hitting the market,” Pollick added.
“The lack of supply coupled with falling prices will eventually work together to create a more stable price environment. Compared with the U.S., the Canadian housing market is not nearly in as bad shape.”
Builders in Saskatoon cited reduced labour costs as new housing prices fell by 0.7 per cent in that city, while prices went down by 1.3 per cent in Calgary and 0.3 per cent in Edmonton, the federal agency said.
Monthly prices remained unchanged in Vancouver, Toronto and Oshawa, Quebec and Montreal in December but increased slightly by 0.2 per cent in Ottawa-Gatineau.
The largest year-over-year increase in new housing prices was registered in St. John’s at just over 24 per cent, followed by Regina at 21.7 per cent.
Compared with December 2007, Statistics Canada said contractors’ selling prices were 4.5 per cent higher in Ottawa-Gatineau and nearly two per cent higher in Toronto and Oshawa.
New housing prices in Saskatoon rose by 0.9 per cent year-over-year, confirming a continuing trend of deceleration in this city.
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