Canadian homes sales down 6.8%

Sales of existing homes fell 6.8 per cent to 117,051 units in the first quarter of 2008 compared with the previous quarter, the Canadian Real Estate Association said Tuesday. The figures were the third consecutive quarterly decline since activity peaked in the second quarter last year. Fewer transactions in February and March in Toronto as well as fewer sales in British Columbia helped to drive the figures down. Sales activity in Toronto accounts for almost one fifth of all existing home sales in Canada, according to the association.

It is also important to remember that 2007 was another record year for MLS residential property sales in Canada,” said association president Cal Lindberg. “Any comparisons with last year means comparing with a record year. What the statistics indicate is that the residential housing market is easing back towards more historically typical levels.”

Not all provinces saw a decline. Seasonally adjusted sales activity set a new quarterly record in Saskatchewan, and quarterly transactions reached their second highest level ever in Newfoundland & Labrador.

In March, around 38,128 properties traded hands via the Multiple Listing Service on a seasonally adjusted basis - a decline of 0.4 per cent from February, the association said. The number of MLS residential new listings hit the highest quarterly level ever in the first quarter. A seasonally adjusted total of 223,405 homes were listed in the first three months of 2008, up 5.5 per cent over the fourth quarter last year.

There were record quarter-over-quarter gains in new listings in Alberta and British Columbia, which offset a quarterly decline in new listings in Toronto.

The CREA_report said that the MLS housing market became more balanced in every province except Saskatchewan. The market in Alberta remained the most balanced in the country, while sellers’ markets persisted in Saskatchewan and Manitoba.

“Housing markets are becoming more balanced and price gains are becoming more modest as a result,” said chief economist Gregory Klump. “This trend is forecast to continue, as rising mortgage carrying costs and property taxes erode affordability.”

The more balanced market was reflected in more modest price gains. The average residential price rose 6.4 per cent year-over-year to $312,583 in the first quarter of 2008. This increase represented the smallest year-over-year advance since the fourth quarter of 2001.

However, in Manitoba and Newfoundland and Labrador, average residential prices posted the biggest year-over-year increase ever in the first quarter of 2008.

“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.

Residential unit sales March 2008 (% change from March 2007):

• British Columbia 7,319 (-22.4)
• Prairie Provinces 7,519 (-28.2)
• Alberta 5,360 (-34.3)
• Saskatchewan 1,096 (-1.0)
• Manitoba 1,063 (-11.6)
• Ontario 15,408 (-18.1)
• Quebec 8,547 (-7.7)
• Atlantic Provinces 1,648 (-18.1)
• New Brunswick 514 (-22.6)
• Nova Scotia 814 (-16.7)
• Prince Edward Island 81 (-23.6)
• Newfoundland 239 (-10.2)
• Yukon 21 (-25.0)
• Northwest Territories 13 (-13.3)
• CANADA (actual) 40,475 (-19.1)
• CANADA (seasonally adjusted) 38,128 (-12.5)

Source: Canadian Real Estate Association