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TORONTO (Reuters) - Canada's real estate market is expected to be "somewhat static" for at least the next six months as the economic downturn makes potential buyers extra cautious, while the average house price is expected to fall, according to a report on Wednesday.
The Re/Max Housing Market Outlook, which tracks 22 markets across the country, says it expects 440,000 homes to change hands in 2008, down 15 percent from 2007. It predicted the same number of sales for next year, but the first six to nine months of 2009 will be under pressure from volatility in financial markets and the threat of recession.
Housing markets should recover as stability returns to the financial sector, the Re/Max report said. If consumer confidence is restored and overall economic activity picks up, so should the housing market and a bounce-back could occur "as early as spring", the report said.
A buyer's market has emerged in the latter half of 2008 after a strong start to the year. Housing values are expected to slip 3 percent to an average C$300,000 ($238,095) from last year's record peak. By year-end 2009, unit sales should match 2008 levels, while the average price is forecast to fall another 2 percent to C$293,000.
"The landscape is definitely changing -- with most markets shifting into either balanced or buyer's territory. The shut out is over," Elton Ash, regional executive vice-president of Re/Max Western Canada, said in a statement.
"Sellers no longer rule the roost."
Eleven major markets are expected to match or exceed 2008 home sales next year, with Saskatoon, Saskatchewan, seen leading the charge.
The other 11 markets are seen falling from 2008 levels, particularly in two British Columbia centers -- Victoria and Kelowna -- and Montreal. The two B.C. centers and Greater Vancouver will see a drop in average prices next year as well.
Canada's housing sector is also expected to see a slower pace of new home construction next year, with the national average for home prices undermined by worries stemming from the global financial crisis.
Reporting by Ka Yan Ng; editing by Rob Wilson