Housing prices down

Vancouver posted Canada's sharpest drop in new home prices in April, Statistics Canada said yesterday.

The federal agency said its housing price index for Vancouver fell 1.2 per cent between March and April as most builders cut prices to boost sales.

Year-to-year, Vancouver's prices are down 9.0 per cent.

On a monthly basis, Edmonton saw the country's second biggest decline at 0.9 per cent, followed by Calgary at 0.8 per cent, StatsCan said.

Across the country, new home prices fell more than expected in April.

StatsCan's national price index dropped 0.6 per cent during the month, compared with a 0.5-per-cent decline in March.

For the year, prices are down three per cent.

Economists had expected a decline of 0.3 per cent in April.

The index has dropped 3.2 per cent from its high in September 2008, the federal agency said.

Posting increases were St. Catharines-Niagara, Ont., up 0.6 per cent, St. John's, N.L., up 0.3 per cent, and the Saint John, Fredericton and Moncton area of New Brunswick, up 0.2 per cent.

"In St. Catharines-Niagara, contractors reported that selling prices have returned to their regular list price levels after a few months of lower transaction prices," StatsCan said.

"In St. John's, builders' prices have been increasing because of high demand for housing, which has created a shortage of lots."

Millan Mulraine, economics strategist at TD Securities, said "the story of a weakening housing sector in Canada continues to be intact.

But he added that it was "hard to miss the regional dimension of the correction, with home prices in the West continuing to correct sharply, while the pace of home-price adjustment in other regions remains modest.

"Even so, with the Canadian economy continuing to weaken and labour market conditions likely to remain unfavourable we expect the housing market correction to unfold over the coming months."

Earlier this week, however, Canada Mortgage and Housing Corp. said housing starts rose more than expected in May, with increased building in the single- and multiple dwelling sectors, a sign that the market is beginning to stabilize.

("April tough month for Vancouver home prices" from Vancouver Province)