TORONTO (Reuters) - Wild winter weather cooled Canada's housing market in the first quarter, with sales of existing homes falling 7.1 percent, the Canadian Real Estate Association said on Thursday.
But the residential resale market did eke out a 0.9 percent rise in March, to 26,799 units, after three straight months of declines, according to CREA, an industry trade organization representing over 90,000 realtors.
For the first quarter, seasonally adjusted sales in Canada declined to 81,747 units.
The association said the decline largely reflected fewer sales in Toronto in February and March. Canada's biggest city accounts for about one-quarter of all existing home sales in Canada's major markets.
"Canada's six-year housing market boom is officially over," Doug Porter, deputy chief economist at BMO Capital Markets said in a note to clients, noting that year-to-date home resales dropped by 13 percent.
"No doubt these results were lashed by this year's never-say-die winter weather, but the broad-based nature of the double-digit sales declines suggests that there was more than just a few feet of snow weighing on the market."
Residential listings surged 4.8 percent in the first three months of 2008, to 154,217 units, the highest quarterly level the association had ever recorded.
"The quarterly jump in new listings and decline in sales activity made the resale housing market more balanced in the first quarter of 2008 than during any other quarter in the past nine years," the association said in a statement.
In March, average home prices increased 4 percent year-over-year to C$329,383. For the first quarter, the major market residential average price climbed 5.5 percent, to C$327,620, the smallest year-over-year price increase since the fourth quarter of 2001.
"The residential average price continues to increase, unlike conditions in many U.S. markets," said association president Cal Lindberg.
"The size of the increase is returning to what we consider more normal levels for most markets in Canada, reflecting a sound but cooling market for existing homes."
The U.S. housing market slump and a credit crunch have sparked a U.S. economic slowdown.
But sales of existing homes in the U.S. rose in February for the first time since July, although economists said it was unlikely the market had reached a bottom.
Porter said buyers in Canada should be cautious in the face of the U.S. downturn. "The real test will be how sales and prices fare in the crucial spring season," he said.