The Vancouver area appears determined to do its bit for the Canadian housing slump as the region leads the country in year-over-year price declines, a national price index released yesterday said.
The Vancouver metropolitan area saw average house prices fall 9.6 per cent in March from a year earlier, the largest drop of six Canadian cities, according to the Teranet-National Bank composite house-price index.
On a monthly basis, Vancouver's prices were down 1.7 per cent in March, second to Toronto's 1.9-per-cent drop.
Vancouver prices have posted nine consecutive monthly declines and in March were down 11.7 per cent from their peak in June 2008.
Nationally, housing prices continued their slide in March, falling 5.8 per cent from a year ago, according to a national housing-price index released yesterday.
March's national decline followed a 4.1-per-cent drop in February, and was the seventh month in a row that the Teranet-National Bank composite house-price index showed a month-over-month decrease in housing prices -- the longest run of monthly declines in the index's nine-year coverage.
The composite is now down 8.5 per cent from its peak last August.
The index measures housing-price fluctuations in six Canadian cities. Of those six, prices actually rose over the previous year by one per cent in Ottawa and 2.9 per cent in Montreal, though the rate of increases has slowed considerably.
Marc Pinsonneault, senior economist at National Bank Financial, pointed out that even with those gains, all six cities are showing month-to-month declines.
"The question is: Will home-price deflation worsen in Canada to the extent it did in the U. S.?" asked Pinsonneault."We do not believe so.
"Existing home sales were up in Canada in April for a third-consecutive month, while new listings continued their slide. As a result, the Canadian home-resale market now appears balanced. Home-price deflation should soon abate."
Not everyone sees a quick end to the slide.
"With the weakening economy and weak labour-market conditions expected to weaken demand, the correction in the Canadian housing market is expected to continue for some time," said Millan Mulraine, economic strategist at TD Securities.
