Grinding recession sure to cause further decline in prices
Alia Mcmullen
Province
TORONTO — Canada‘s housing market continued to soften in January amid declines in both the price and sales of existing homes, particularly in Ontario, B.C. and Alberta, figures from the Canadian Real Estate Association showed Friday.
“The deepening recession, which began in earnest among exporters, is now more forcefully dragging down the domestic side of the economy,” said Douglas Porter, the deputy chief economist at BMO Capital Markets.
“The ongoing sharp drop in home sales points to further declines in prices as well as a deeper pullback in new home building.”
Existing home sales fell a seasonally adjusted 3.1 per cent to 26,300 units in January, following a 1.8-per-cent decline in December, and were down a sharp 37.3 per cent from January last year.
Despite this decline, Derek Holt, an economist at Scotia Capital, said the supply of unsold homes on the market was still too high relative to demand, putting downward pressure on prices. The average house price dropped 11.3 per cent from a year earlier, the figures showed.
He said the data reflected the further deterioration in the national housing market, which deepened alongside the rise in unemployment and increasing pressure on consumer spending.
About 52 per cent of Canada‘s largest markets reported a decline in house prices from January, 2008.
Calgary was the worst hit, with prices down 11.4 per cent over the year, followed by an 8.8-per-cent drop in Vancouver.
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