Saturday, January 10, 2009

New Home Prices Falling

From the Financial Post:

New home prices fell in November for the second consecutive month-to-month decrease, Statistics Canada said Monday.

The average price on a new house declined 0.3%, the federal agency said, as demand continued to cool across the national real estate market in the fall.

The dip continues the first reverse in home prices in more than a decade, following the 0.4% decline experienced in October.

Yet the results varied from region to region, with some markets still witnessing considerable price increases.

St. John's recorded the largest annualized gain, with the value of a new home up more than 25% from 2007, a clip that narrowly outpaced Regina. The monthly increase in St. John's was 3.4%.
In a sign that Saskatchewan is beginning to feel the bite of a recession it has largely avoided so far, home prices were flat in Regina in November while in Saskatoon prices continued to come down.

New home prices were down 0.5% in Saskatoon "confirming a trend of deceleration in this city," Statscan said. "Builders continued to report difficult market conditions."

The drops continued further west. New home prices in Edmonton recorded a 12-month plunge of 7.9% - largest monthly decline since May 1985. Prices dipped 2.5% in Calgary. On a monthly basis, prices fell 0.3% in Edmonton and 1.1% in Calgary between October and November.

On the West Coast, builders cut new home prices in Vancouver by 1.7% in November, a trend continued in Victoria, Statscan said.

Markets in Eastern Canada, which have shown more stable supply-demand conditions, continued to rise, Statscan said. Compared with November 2007, contractors' selling prices were 4.3% higher in Ottawa and 2.0% higher in Toronto. In Québec, the 12-month growth rate was 5.4%, while in Montréal, prices increased 4.6%, the agency said.

No market east of Saskatchewan experienced a month-to-month decline in new home prices.


Traciatim said...

I'm not sure I like the new housing price index as an indicator of the housing market as much as something like average sales price. Stats Canada doesn't do many adjustments for things like square footage, materials, and similar differences.

Contrast this with the computer and peripheral price index which is only lower now than it was previously because of an insane amount of adjustment done to the figures.

I guess Stats Canada just makes thing up to whatever suits their goals at the time.

Toronto Condo said...

This should have been expected. You can not over blow prices then act surprised when they start to come back down. ( OPEC is doing the same. Saying they have to cut production because the prices are dropping. Sure, but they were way over priced to begin with. Me, I'd be happy with billion in profit.) I would also walk away from a contract for a over priced house. You do the math, save 20-30 grand, lose 1k down payment. Sure no one made then place the contract on a overpriced home. But then no one made the builder wait to close after the house was done.see more in Toronto Lofts