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Housing resales drop 6.3 per cent in January

LORI McLEOD

Friday, February 29, 2008

A predicted slowdown in the residential housing market has been proven out by January resale housing figures which show a drop in year-over-year unit sales in every part of the country except Saskatchewan and Newfoundland.

Home sales volumes dropped by an average of 6.3 per cent across Canada compared with January, 2007, at the same time a glut of new listings flooded the market, according to data released Friday by the Canadian Real Estate Association (CREA).

New listings on the Multiple Listing Service rose 10.7 per cent in January from December, the largest month-over-month increase in seven years, according to CREA. The 74,943 units up for sale in January set a new record for the month.

“The overall increase in new listings stemmed mainly from a jump in listings in Western Canada,” said Gregory Klump, chief economist at CREA, in a statement.

Lofty home prices continued to keep buyers in British Columbia and Alberta on the sidelines last month.

New listings rose by 42.9 per cent year-over-year in Alberta in January, while unit sales fell by 24.8 per cent. While last year's double-digit price gains appear to be over, the average home price in Alberta still climbed by 9.2 per cent compared with January, 2007.

Across Canada, home price growth slowed to 9.6 per cent year-over-year, the smallest monthly increase since April, 2007. The average price of a resale housing unit in Canada was $309,448 last month, with the highest prices in British Columbia at $453,098 and Alberta at $357,574, according to CREA.

Sales activity followed a dramatically different pattern in the country's hottest market, Saskatchewan, where buyers still greatly outnumber sellers. New listings surged by 25.5 per cent year-over-year but unit sales rose 37.6 per cent, though on a relatively small base of 567 unit sales. Prices rose by a whopping 49.4 per cent over January, 2007.

“Even with a rebound in listings, the resale housing market in Saskatchewan is tight as a drum due to a jump in sales activity and price increases there reflect that,” Mr. Klump said.

Sales activity hit its second highest monthly level ever in Newfoundland and Labrador in January, up 47.5 per cent to 236 units from 160 the year before.

Unit sales cooled in Ontario, Quebec and much of Atlantic Canada, in part due to snow storms which “made it extremely difficult just to get down residential streets to show a listing,” said Ann Bosley, president of CREA, in a statement.
© The Globe and Mail
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