New home prices take a hit in BC

New home prices in Vancouver posted Canada's second-sharpest decline in March, Statistics Canada says.

Prices in Vancouver fell 1.1 per cent in March, just behind a 1.2-per-cent drop in each of Calgary and Edmonton, StatsCan said yesterday.

Victoria, where new home prices fell 0.9 per cent in March, tied with St. Catharines-Niagara for Canada's third-steepest decrease, the federal agency said.

"In Vancouver and Victoria, builders reported lower prices due to competition and slow market conditions," StatsCan said.

"In Calgary and Edmonton, declines were attributed to lower material and labour costs and lower lot prices from developers."

New house prices in Vancouver have fallen by 7.8 per cent from a year ago, StatsCan said. Victoria's have sunk by 6.6 per cent.

Nationally, new home prices fell for the sixth straight month in March as the country's real-estate market continued to weaken amid the economic downturn.

Average prices dropped 0.5 per cent during the month, compared with a 0.7-per-cent drop in February.

The March decline was in line with analysts' forecasts.

For the year, new home prices were down 2.4 per cent in March, compared with a year-over-year decline of 1.8 per cent in February.

Monthly prices also were in decline in Saskatoon, off 0.7 per cent, Charlottetown, down 0.4 per cent, Toronto, down 0.3 per cent and Hamilton, Ont., off 0.2 per cent.

Meanwhile, prices rose in St. John's, N.L., which posted a 0.4-per-cent increase and Montreal, where they climbed 0.3 per cent.

Economist Millan Mulraine of TD Securities said "the continued drop in new home prices is a reflection of the overall weakness in the Canadian housing market.

"The weak domestic economic conditions and soft labour-market conditions continue to sap housing demand," Mulraine added.

In a separate report, Altus Group predicted housing starts in B.C. will fall from 34,321 last year to 17,553 in 2009, rising slightly to 20,425 in 2010.

On Friday, Canada Mortgage and Housing Corp. said the number of national housing starts fell to 117,400 in April from 146,500 in March

(Source: Vancouver Province)