December 15, 2008 / 5:40 PM / in 9 years

Existing home sales sag 12.3 percent in November

TORONTO (Reuters) - Existing home sales in Canada fell to their lowest level in nearly eight years in November, as the economic slowdown squeezed housing markets across the country, the Canadian Real Estate Association said on Monday.

Existing home sales were down 12.3 percent to a seasonally adjusted 27,743 units in November from October, CREA said, which marked the lowest level for monthly activity since January 2001.

The average price was down 9.8 percent at C$280,880 ($226,516), compared with the level recorded in the same month last year.

CREA said the housing market reflected the economic reality of the country, which the Bank of Canada said last week was entering a recession.

"These changes in the Canadian housing market reflect a broader and weakened picture of both the economy and buyer sentiment," said CREA Chief Economist Gregory Klump.

"National sales activity and price trends will continue reflecting increased cautiousness on the part of lenders and buyers, as the economy works its way through and out of the current recession."

The drop in existing home sales for the month was not as sharp as the 14 percent skid recorded in October, but the latest decline reinforced the view that consumers were growing

more cautious and spending less as fears of a recession mount.

"The report underscores that the Canadian housing correction continued in earnest in November as sales activity continues to moderate at a fairly brisk pace," Millan Mulraine, economics strategist at TD Securities, wrote in a note.

Home sales dropped by double digits in most provinces. Sales skidded 14.0 percent in Alberta, 13.1 percent in British Columbia, 12.4 percent in Quebec and 12.1 percent in Ontario, said the association, which represents about 97,000 brokers and agents across the country.

($1=$1.24 Canadian)

Reporting by Frank Pingue; editing by Rob Wilson

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