(CP)
Monday, April 21, 2008

OTTAWA—Existing homes sales tumbled 13 percent for the first three months of the year compared to last year and the resale market has become “more balanced” for the first time in nearly a decade, prompting one analyst to call the end of Canada’s hot housing market.
“Canada’s six-year housing market boom is officially over,” Bank of Montreal economist Doug Porter said in response to the January-March survey released last Thursday by the Canadian Real Estate Association.

“Aside from a few choice Prairie locales, sales are melting faster than this year’s snow pack,” Porter said in a note.
“You know things are calming down quickly when the Canadian Real Estate Association says that the market is ‘more balanced compared to’ any other quarter over the past nine years,” he added.
Porter said some of the previous hot markets, such as Calgary and Edmonton, have witnessed “spectacular declines in activity.”
In Calgary, residential home sales slid 35.9 percent, or by 6,354 units, during the quarter while new listings jumped 29.8 percent, or by 16,794 units.
Edmonton’s residential sales also were down, 29.8 percent (4,071 units), while new listings were up 52.1 percent (11,228 units).
CREA said that seasonally-adjusted sales activity was down 7.1 percent to 81,747 units in the quarter, compared to the previous quarter, which was the fourth-highest sales period ever.
The group said much of the slide was tied to lower activity in Toronto during February and March because the city accounts for about a quarter of the country’s come sales in major markets.
Toronto saw its residential unit sales drop 13.4 percent (17,721 units), though new listings also were down by seven percent (36,885 units).
“Many major 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,” CREA chief economist Gregory Klump said.
Other cities that saw large drops in sales in the first quarter include Vancouver, where sales slid 9.6 percent, Winnipeg (down 7.7 percent) and Halifax (14.2 percent).
Of the areas surveyed, sales were only up in Newfoundland by 14.3 percent and Thunder Bay (9.5 percent).