Canadian existing-home sales fall 41 pct in January

Fri Feb 13, 2009 4:51pm EST
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TORONTO (Reuters) - Sales of previously owned Canadian homes plunged 41 percent in January from a year earlier while prices dropped 11 percent, as a slowing economic further eroded consumer confidence, a report said on Friday.

Last month, sales fell to 16,343 units, down 40.9 percent from January 2008, the Canadian Real Estate Association (CREA) said.

Most of the slower sales activity was in British Columbia and Ontario, while Manitoba and Newfoundland and Labrador had an increase. All 25 major markets that CREA measures reported a drop in unit sales.

"While another particularly harsh winter may have played a small role in the dismal sales figures, there is little doubt that Canadians are hunkering down amid widespread job losses and sagging consumer confidence," said Doug Porter, deputy chief economist at BMO Capital Markets.

The average home price fell 11.3 percent in January to C$273,607 ($220,651) from C$308,322 a year earlier.

Seasonally adjusted residential sales activity fell 3.1 percent nationally to 26,376 units in January from December, CREA said.

The housing market could deteriorate further in the coming months as more Canadians lose their jobs. Canada suffered its biggest job losses in three decades last month when recession forced employers to cut a record 129,000 workers.

That raised concern that consumer spending could wither along with confidence, which is closely tied to the strength of the labor market.

Last week, CREA forecast sales activity is expected to drop 16.9 percent to 360,900 units in 2009 following a 17.1 percent tumble in 2008.

($1=$1.24 Canadian)

(Reporting by Ka Yan Ng; Editing by Frank McGurty)