BC to take another big home sales hit

B.C. is expected to post the country's steepest drop in house sales in 2009, the Canadian Real Estate Association says.

Home sales in B.C. will tumble 19.2 per cent in 2009 to 55,700 units, slightly worse than the 19.1-per-cent decline foreseen for each of Alberta and Ontario, the association said yesterday.

This year's drop comes on the heels of B.C.'s 33-per-cent tumble in 2008, the Ottawa-based association said. Average house prices in B.C. will likely drop 10.6 per cent this year to $406,300, following last year's 3.5-per-cent price increase, it said.

In 2010, a year when average Canadian prices are expected to grow by 1.1 per cent, B.C.'s average price will slip by 0.6 per cent to $404,000, said the association, which represents 100 real-estate boards across Canada.

CREA chief economist Gregory Klump said that growing caution among homebuyers and mortgage lenders means active listings will take longer to sell in 2009.

"Supply will take time to adjust to lower demand but sellers unwilling to accept offers below their expectations will remove their home from the market," he said.

"Fewer active listings reduces buyer choice and in time puts a floor under prices," Klump said.

In 2010, B.C.'s overall house sales will rebound by a nation-leading 28.4 per cent. Nationally, the association foresees sales growth of 9.9 per cent next year.

Separately, Canada Mortgage and Housing Corp. said seasonally adjusted housing starts in urban B.C. tumbled 29.1 per cent, between December and January, just behind a 30.3-per-cent plunge on the Prairies.

In the Vancouver area, new-home starts last month fell to only half the level they were in January 2008, CMHC said.

Builders in the area broke ground on 609 homes in January, down 54.3 per cent from a year ago.

CMHC senior market analyst Robyn Adamache called January a taste of things to come.

"The slowing trend that began in the last part of 2008 will continue, with fewer housing starts forecast for the year ahead," she said.

"A well-supplied resale market and a growing stock of unsold new homes on the market mean that developers are holding off on new projects until more of the existing inventories are absorbed."

Year-over-year starts fell by 87 per cent in the Abbotsford area and 82 per cent in Chilliwack, CMHC said.

Nanaimo, which saw a 154-per-cent jump, bucked the trend in urban B.C. toward fewer starts.

(Source: Vancouver Province)