Canada: House Prises Rise 4.8 Percent

Canadian resale housing activity declined in the first quarter of 2008 compared to the previous quarter while new listings reached their highest quarterly level ever, according to statistics released by The Canadian Real Estate Association (CREA). The result was the most balanced resale housing market of any quarter in the past nine years.

Seasonally adjusted Canadian sales activity declined 6.8 per cent to 117,051 units in the first quarter of 2008 compared to the fourth highest level on record, reached the previous quarter. It was the third consecutive quarterly decline since activity peaked in the second quarter last year.

Much of the decline in activity resulted from fewer transactions in Toronto during February and March. Sales activity in Toronto accounts for almost one fifth of all existing home sales in Canada. Fewer sales in British Columbia were also responsible for a significant share of the national decline in the first quarter.

Regional variations in the trend for sales activity persist. Seasonally adjusted sales activity set a new quarterly record in Saskatchewan, and quarterly transactions reached their second highest level ever in Newfoundland & Labrador.

The Canadian residential average price climbed 6.4 per cent year-over-year to $312,583 in the first quarter 2008. This is the smallest year-over-year price increase since the fourth quarter of 2001, reflecting a more balanced market.

Price gains did not become more modest in all provinces. In Manitoba and Newfoundland & Labrador, Canadian average house prices posted the biggest year-over-year increase ever in the first quarter of 2008.

In March, the Canadian average price was $314,279. That‘s a 4.8 per cent increase year-over-year – the smallest increase since October 2001.

“Resale housing activity is trending lower in the four most active provinces,” said CREA Chief Economist Gregory Klump. “Housing markets are becoming more balanced and price gains are becoming more modest as a result. This trend is forecast to continue, as rising mortgage carrying costs and property taxes erode affordability,” he added.

“The credit crunch has had limited impact on Canadian mortgage lending to date. Resale housing activity will continue to be supported by rising after-tax incomes, high employment, and declining interest rates,” said Klump.

Average House Price In Canada
March 2008

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