Canada home prices sag 4.1 pct in February

Wed Apr 29, 2009 11:58am EDT
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TORONTO (Reuters) - Canadian home prices accelerated their decline in February, down 4.1 percent from a year ago, according to a report issued on Wednesday.

The Teranet-National Bank National Composite House Price Index, which measures the rate of change of prices for single-family homes in six metropolitan areas, also showed prices were down 7.4 percent nationally from the peak hit in August last year. Home prices fell 2.4 percent in January from a year earlier.

"The disinflation that began in February 2008 is now a year old. The retreat means that, on the whole, Canadian housing has become a buyer's market after five years of seller's-market conditions from 2002 to 2007," said Marc Pinsonneault, senior economist at National Bank Financial.

"Will home price deflation worsen in Canada to the extent it did in the U.S.? We do not believe so."

Home prices in Calgary, Alberta, suffered the biggest year over year drop, falling 8.1 percent in February from the same month a year ago. That was followed by a 6.4 percent slide in Vancouver, British Columbia, and a 5 percent decline in Toronto.

Halifax, Nova Scotia, joined the list of markets with falling home prices, with a 0.5 percent dip.

Meanwhile, home prices rose 3.2 percent in Montreal from a year earlier, and were up 2.8 percent in Ottawa.

Market watchers say current price declines are part of an ongoing retreat since the market hit its peak in 2007.

Housing activity, including resales and ground-breakings, is generally seeing a period of softness in Canada, though the sector has not experienced the same sort of plunge that has been seen in the United States.   Continued...