TORONTO (Reuters) - Existing home sales in Canada fell 17.1 percent in 2008, hit by a sharp drop in activity in the fourth quarter as the economy entered recession and consumer confidence slumped, the Canadian Real Estate Association said on Thursday.
The drop in activity in the fourth quarter accounted for more than half of the decline in transactions from 2007, the record high year. December existing home sales fell 1.8 percent following back-to-back double-digit declines in the previous two months.
Approximately 434,477 homes changed hands last year through Canadian real estate agents, down 17.1 percent from the 523,855 properties sold in 2007, the association said.
Western provinces British Columbia and Alberta posted the largest decline in sales. Only Newfoundland and Labrador, the easternmost province, bucked the national trend with a sales rise.
The 2008 national average home price slipped by 0.7 percent to C$303,594 ($242,875) from the year before. Gains were recorded in the first half of 2008 before declining throughout the last six months as consumer confidence was hard hit.
"Canada's housing boom fizzled in 2008 as the credit squeeze and economic downturn choked off demand," said Robert Kavcic, an economist at BMO Capital Markets. "With job losses accelerating late last year, sales activity will likely remain under pressure, while the imbalance of listings relative to sales should keep prices in correction mode.
"All told, 2009 is shaping up to be another difficult year in the Canadian housing market."
December existing home sales fell to a seasonally adjusted 27,357 units, the lowest level for monthly activity since December 2000.
The average price was down 11 percent at C$281,110 in December 2008, compared with December 2007.
Reporting by Ka Yan Ng; editing by Peter Galloway