Residential home sales in Canada this year will fall 11.5 per cent from last year's record level, a major real estate organization predicted Tuesday.

The number of homes sold through the Multiple Listing Service will drop from 520,747 in 2007 to 460,900 this year, the Canadian Real Estate Association said in a market forecast. Sales are expected to fall another four per cent in 2009, it added.

The forecast sees sales falling this year in all provinces except Saskatchewan and Newfoundland and Labrador. The biggest sales tumble will take place in Alberta, CREA said, where sales are poised to slide by almost 19 per cent.

CREA average residential price forecast
Region 2007 avg. 2008 forecast % change
B.C. $439,123 $485,900 10.7%
Alberta $356,235 $373,000 4.7%
Sask. $174,405 $208,400 19.5%
Manitoba $169,189 $187,800 11.0%
Ontario $299,544 $312,400 4.3%
Quebec $208,240 $218,000 4.7%
New Brunswick $136,603 $142,800 4.5%
Nova Scotia $180,989 $189,100 4.5%
P.E.I. $133,457 $141,000 5.7%
N.L. $149,258 $159,200 6.7%
CANADA $307,265 $323,500 5.3%

Nationally, the association expects price growth to cool but remain positive in every province. Average prices will set new records in every province this year and next, the CREA predicted.

"MLS home sales will remain strong, despite coming in lower than last year’s breakneck pace," CREA chief economist Gregory Klump said in a release.

"After-tax income growth, strong employment and short-term interest rate cuts will support housing demand, despite further home price increases and increasing economic uncertainty that are wearing on consumer sentiment about making purchases such as a car or home," he said.

The average residential selling price is forecast to rise by 5.3 per cent this year to $323,500. CREA sees the biggest price gains in Saskatchewan (up 19.5 per cent) and the smallest in Ontario (up 4.3 per cent).

It sees Alberta's average price going up by just 4.7 per cent this year, a dramatic cooling from 2007's 24.8 per cent increase. The Calgary Real Estate Board reported last week that prices in April actually dropped 1.2 per cent in that city compared to a year ago and houses are taking twice as long to sell.

"The market is no longer bearing the prices it did a year ago," said Ed Jensen, president of the Calgary Real Estate Board.

In Edmonton, the year-over-year price drop was 6.6 per cent in April.

The CREA forecast calls for national prices to rise another 4.2 per cent to $337,000 in 2009, with Manitoba's 9.8 per cent increase topping the list. Ontario price increases are again forecast to lag behind the rest, with a gain of 3.1 per cent.