Alberta leads slide in housing

Mario Toneguzzi, Calgary HeraldPublished: Wednesday, October 01, 2008

Alberta led all provinces in Canada with the biggest decrease in the average sale price for an existing home in August compared with a year ago, according to the Canadian Real Estate Association.
Statistics released Tuesday by the association show the average MLS sale price in Alberta dipped by 5.2 per cent to $343,148. The only other province experiencing a year-over-year price decline was British Columbia at 4.1 per cent to $421,685. At the national level, prices in August dropped by 4.6 per cent from a year ago to $290,347.
The association numbers also showed sales in Alberta were down 8.4 per cent from a year ago while new listings have dropped by 18.4 per cent.
Nationally, sales were down 21 per cent and new listings were off by 3.4 per cent. British Columbia saw a sales decline of 47.4 per cent.
"Slower activity in some of Canada's pricier housing markets compared to year-ago levels will continue weighing on the national average price," said Gregory Klump, the association's chief economist.
On a year-to-date basis until the end of August, Alberta MLS sales are down 22.7 per cent but new listings were up 9.9 per cent. The average sale price has increased by 0.2 per cent to $357,145.
Across the country, sales are down 14 per cent year-to-date compared with the same period in 2007 and new listings increased by 8.7 per cent. The average sale price has increased by 1.9 per cent to $309,698.
Every drop in the value of Canadian real estate elevates the level of anxiety about a U.S.-style housing meltdown in Canada, said CIBC World Markets economist Benjamin Tal in a research note.
"To be sure, house prices in Canada will continue to ease in the coming months. But the triggers that led to a free fall in Canadian real estate markets in the early 1990s and today in U.S. markets are nowhere to be found," wrote Tal.
"At this rate of growth in unit sales and new listings, by early next year the Canadian housing market will turn, for the first time since 1995, to a buyer's market."
Tal also said Calgary and Edmonton, where until recently homeowners doubled the value of their real estate "during the course of breakfast," are now seeing close to two and a half new house listings for every unit sold.
And with house prices in Alberta doubling since 2004, housing affordability has deteriorated to levels not seen since the early 1990s, added Tal.