Poor sales market results in deep slash by one developer
Derrick Penner
Sun
Prices of new houses in Metro Vancouver continued their slide between December and January, Statistics Canada reported Wednesday.
But the agency’s measure does not include condominiums, making it an incomplete picture of the market in the region.
Metro Vancouver new-house prices dropped 0.7 per cent between December and January on Statistics Canada’s new-housing-price index.
Year over year, Vancouver’s index measure was down 3.2 per cent, though some builders have been discounting prices more steeply in a market that has seen declining sales and prices on the resale side.
Dale Barron, president of Coquitlam-based Morningstar Homes Ltd., said he cut prices on new houses in his developments, which typically cost about $730,000, by about $100,000, or 13 per cent. Barron said he did this by squeezing his margin and coaxing suppliers into cutting costs.
“When the market started to turn last fall, we got together all of our trades and all our suppliers and looked at what we were selling, and knew right up front we had to deliver it for a lot less,” Barron said in an interview.
“Sales had really stopped,” Barron added, but his firm racked up its highest number of sales in January and February with the price cut.
Statistics Canada analyst Albert Near said the housing price index does not factor in condominiums, which are a dominant part of the Metro Vancouver market.
“What we measure are single-detached homes, usually in suburbia,” Near said.
Across the country, the Statistics Canada price index recorded a 0.6-per-cent decline in January compared to a year ago, the first year-over-year drop in 12 years. The last year-over-year decline was recorded in January 1997.
Edmonton saw the steepest monthly price drop between December and January, at 2.8 per cent, followed by Calgary at 2.1 per cent and Victoria at 1.1 per cent.
Edmonton‘s annual decrease of 10.4 per cent was the highest in Canada.
St. John’s, N.L., at 24.1 per cent, and Regina‘s 21.7-per-cent jump were the highest increases in the country between January 2008 and January 2009.
TD Securities said the national year-over-year decline was the largest since 1991 and noted that eight of the last 12 months have recorded a drop in the price of new homes. It said the figures were an indication that the housing market has continued to cool during the ongoing economic crisis.
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