Economic Downturn and Dampened Consumer Confidence Caused House Prices to Dip During Fourth Quarter

During the fourth quarter of 2008, Canada's real estate market posted a decline in both unit sales and house prices, according to a House Price Survey released by Royal LePage Real Estate Services. The combination of a global economy in recession and shrinking employment figures did much to dampen consumer confidence, diminish home sales and cause house prices to drop.

Of the housing types surveyed, the average price of detached bungalows dipped by 4.8 per cent to $319,640, followed by standard condominiums, which decreased by 5.2 per cent to $233,230, year-over-year. The average price of standard two-storey properties fell by 6.3 per cent to $376,140, year-over-year.

“For many people, deciding to hold off on buying a home at the end of the year was an easy decision to make. With consumer confidence in tatters, many were reticent about making any large purchases. However, waiting on the sidelines during the normally slow winter market is one thing, sitting out the seasonally busy spring market is quite a different story. Activity levels should rise as the year progresses,” said Phil Soper, president and chief executive, Royal LePage Real Estate Services.

Looking ahead, Soper concluded, “the balance of 2009 should see gradual and continuous improvements as the effects of low mortgage rates along with efforts by governments and central banks to get the economy back on its feet again begin to take hold.”

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	Detached Bungalow		Standard Two Storey		Standard Condominium
	2008 Q4 Average	Annual Change	2008 Q4 Average	Annual Change	2008 Q4 Average	Annual Change
Halifax	$215,000	6.8%	$259,667	12.1%	$159,500	7.4%
Charlottetown	$157,000	3.3%	$188,000	4.4%	N/A	N/A
Moncton	$150,000	-0.7%	$126,000	-6.7%	N/A	N/A
Fredericton	$162,000	4.5%	$210,000	6.6%	$133,000	5.6%
Saint John	$225,064	14.5%	$294,695	15.6%	N/A	N/A
St. John's	$190,050	20.5%	$261,800	19.4%	$203,000	23.0%
Atlantic	$190,921	10.3%	$238,310	12.4%	$174,183	19.8%
Montreal	$261,372	1.2%	$334,850	-2.2%	$200,284	-1.3%
Ottawa	$321,333	4.1%	$317,083	3.5%	$207,167	5.2%
Toronto	$411,483	-8.2%	$513,417	-6.8%	$299,675	-2.3%
Winnipeg	$219,650	2.4%	$247,029	4.0%	$132,083	3.7%
Regina	$274,167	19.6%	$238,260	19.7%	$172,917	20.1%
Saskatoon	$300,000	2.6%	$328,750	2.3%	$194,250	-5.2%
Calgary	$410,333	-4.5%	$408,263	-11.6%	$257,189	-9.5%
Edmonton	$301,429	-10.5%	$337,075	-8.9%	$206,854	-14.0%
Vancouver	$743,750	-6.5%	$837,500	-6.4%	$405,000	-5.4%
Victoria	$425,000	0.0%	$433,000	-5.0%	$265,000	-9.2%
National	$319,640	-4.8%	$376,140	-6.3%	$233,230	-5.2%

Average house prices are based on an average of all sub-markets examined in the area, except for the smaller markets of Charlottetown, Moncton, Fredericton, Saint John and Victoria.

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