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Canadian real estate boom over, statistics indicate

Last Updated: Friday, June 13, 2008 | 5:30 PM ET

CBC News
A recently built home sits ready for sale.A recently built home sits ready for sale. (Seth Perlman/Associated Press)

The real estate market has run out of steam, a report from the Canadian Real Estate Association (CREA) suggests.

"Canadian housing market activity continued to slide in May, confirming that the six-year housing boom has, indeed, fizzled, and the poor winter results were not just weather- and holiday-related," Bank of Montreal economic analyst Robert Kavcic said in a commentary.

He based his comment on the CREA monthly report on 25 major markets, released Friday, which shows that volumes and prices are slowing or falling compared to May 2007.

  • Unit sales fell 16.9 per cent in May to 35,040.
  • Total dollar volume fell 16 per cent to $11.8 billion.
  • Average housing prices in May were up only 1.1 per cent, the smallest year-over-year increase in more than seven years.

"Rising food, fuel and home prices are denting consumer confidence," CREA chief economist Gregory Klump said in a news release.

But he noted there were more listings in May than ever, a record 54,029, up 2.2 per cent from April.

The drop in seasonally adjusted sales was driven by drops in Vancouver, Regina and Saskatoon, offsetting increases in Toronto, Ottawa and London-St. Thomas.

The average price of a May sale, $337,071, ranged from a high of $624,639 in Vancouver to a low of $139,936 in Thunder Bay, Ont.

Over the past year, the biggest percentage increase was in Regina — up 44.9 per cent to $235,458 — while the biggest drop was in Windsor-Essex, Ont., down 5.5 per cent to $159,682.

Prices fell by less than five per cent in Calgary and Edmonton and rose substantially in Saskatoon, Newfoundland and Labrador, and Saint John, N.B.

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