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Average home price drops 5.1 per cent

LORI MCLEOD

Globe and Mail Update

Latest comment posted at 2:21 PM EST 15/09/08

Declining sales volume in Canada's most expensive cities drags average price lower in August ...Read the full article

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  1. CallofDuty . from Toronto, Canada writes: Hey Western folks....when price per barrel hits $50...they'are plenty of jobs here in Ontario at the Tim Hortens.
  2. Aloha Eric from Toronto, Canada writes: I love the spin: 'In a sign the market is stabilizing, however, the level of new listings cooled from the record levels hit in the four previous months.' Um, i hate to break it to you but this is called seasonality since most people list their house in the spring, but nice try.

    Now if i were to describe the market...'worldwide housing market in historic collapse, prices down in Canada for the first time in 18 years.'
  3. Matthew M from Toronto, Canada writes: Anyone know the stats for Toronto and Ontario? They seem to have left those major markets out.
  4. Nick Palas from Canada writes:
    Real Estate in Canada has officially crashed!

    Once prices start sliding like this its a slipperly slope.............

    TTTTTIIIIIIIIIIIIIIMMMMMMMBBBBBBBBBBBERRRRRRRRRRR!!!!!!!!!!!
  5. bill k from Canada writes: This housing crash is just starting as inventory is sky high and sales are dropping. They said homes prices would go up 3-5% this year and so far we are down 5% which means may people are down ten of thousands of dollars and are now upside down on their mortgage.
  6. Jonathan T from Milton, Canada writes: Toronto is down 1% year over year in August.

    Greater Toronto Area is up 1% year over year in August.

    Having said that Toronto, like Vancouver, peaked in March or April. Back then we heard 8% increase year over year. In December 2007 it was 12%. So being that they passed year over year numbers already shows how fast it the price is coming down over the last 4 months.

    In Vancouver prices are falling 10% annualized. However the price fall is accelerating so we may hear about 15-20% fall by next year. Of course that is just speculation at this point.
  7. Binder Dundat from Toronto, Canada writes: Well, no tree grows to the sky.

    It was a spectacular run. Congratulations to all those who bought in 1992 and sold in 2007.
  8. BC Refugee in AB from Canada writes: Call of Duty...I'll keep that in mind for when I get all those calls from folks back East looking for work.....let's see, at $50/BBL my employer might only make $1.5-2 billion....oh shucks, what ever will we do!!!
  9. M C from Canada writes: The next selling season will be characterized by sellers thinking their houses worth more than RE agent can sell it or buyers willing to pay.

    Houses are not be as liquid an asset as RE agent would have you believe. Be prepared to enjoy your property for a long long long time.
  10. Ori Ben Zion from Vancouver, Canada writes: Robert Schiller described Vancouver as the bubbliest city in the world. He's a fellow with a very good track record on such matters. The bursting of the bubble in Van is just beginning. The silver lining of lower listings in August has reversed in September. Listing in Vancouver are once again ramping up. An rush for the exits?
  11. Kay A from Canada writes: I understood that prices in To/Ontario were pretty stable...but who didn't know that the prices in Calgary & Van were crazy & unrealistic.
    Now however, maybe my sisters-in-law can new each afford to buy a house in Langley!
  12. b W from Canada writes: Agree with Aloha Eric from Toronto, this is all spin. These facts can always be skewed by realtor games (i.e., delist then relist so that it shows as a new listing and doesn't show the true length of time on the market, etc.). So, beleive what you know, not what the paper tells you.
  13. Adil Burney from Canada writes: http://canadahousingcrash.blogspot.com/

    CREA has descended to a new low of spinning:

    It is exhorting "for buyers to realize there is no real estate bubble that will burst and send prices to new lows."

    Just wait until the center of the universe (Toronto, no offense from a Montrealer) goes negative

    If only words could have saved bubble discovery, Lehman would be open for business today.

    Why doesn't G&M call CREA out?

    http://canadahousingcrash.blogspot.com/
  14. Was Canadian from United States writes: "It was a spectacular run. Congratulations to all those who bought in 1992 and sold in 2007."

    Ermm, don't those people who sold in 2007 also have to buy in 2007?
  15. Bob Sakamano from Toronto, Canada writes: I sold in February this year and am renting - probably for the next year or two. You don't have to buy another house when you sell....
  16. Binder Dundat from Toronto, Canada writes: "Ermm, don't those people who sold in 2007 also have to buy in 2007?"

    Hardly. You can park your winnings and rent a house, unsavoury though that sounds...
  17. Canadian Cynic from Canada writes: Does this mean that our tax assessments will now drop by 5% since they are based on market value? I will wait and see, without holding my breath for very long.
  18. Was Canadian from New York, United States writes: Bob Sakamano & Binder Dundat - true, not all sellers in 2007 had to re-buy, but I suspect that's what the vast majority did. Once an owner, hard to go back...
  19. Bill Ians from Toronto, Canada writes: bob sakamano - are you really better off renting for 2 years? Would your house have gone down more than the rent you pay? There's a reason you don't pay tax on principle residence, because even if you sell high you have to buy high. Unless you move further out of the city or downsize.
  20. Ursula Seawitch from Canada writes: Real estate is still too expensive for the average family to comfortably afford. And much higher than they were 5 years ago. They still need to come down more
  21. Above Centre from Toronto, Canada writes: Certainly the broader Canadian housing market has had a very good run and I think it has achieved the soft landing we all hoped for. Overheated markets in the west are easing but everyone knew it would happen and it should come as no surprise to homeowners.

    The US market has NOTHING to do with the Canadian market, its as different as orange growers in Florida and apple growers in Ontario, the plight of one is not felt by the other.

    The big picture in Canada sees low interest rates, low unemployment, a relatively strong economy and overall stability. The signs simply are not there for people to start running to the exits and sell at a loss. There are plenty trying to lock in their gains and the worst case scenario is that they end up having to keep their single best asset.

    Owning a house has been and will continue to be one of the best investments. For those trying to make a quick buck...like all quick buck schemes they'll likely get burned.
  22. Alastair james Berry from Nanaimo BC, Canada writes:
    I'm a bit of a CASSANDRA........Here on Vancouver Island at Nanaimo, real estate seems to be 'dead in the water' to a casual observer.

    And as many of our residents are retirees on RRIF income I expect to see many more houses come on the market as the income from the average RRIF is set to fall about 30% next year and with HYDRO RATES and MUNICIPAL taxes heading sharply upwards many will be stretched beyong their financial capabilities AND WILL BE FORCED TO SELL UP!

    Combine this with the collapse of the fishery and forestry along with the closure of our paper mill and things are beginning to look dangerous!
  23. Jonathan T from Canada writes: Alot of people say that this is not the states and what happens down there stays down there. But that is not true from both ends. First we are an integrated economy. You can already see the dramatic effect that they have had on our economy this summer.

    Also the US did not see so many problems when real estate was escalating. When prices start to fall, people stop buying. People get depressed about homes and have less interest fixing them up. The availability of Home equity lines of credit are reduced. These factors result in reduced retail spending and reduced demand for home construction. This in turn hits the economy. Businesses lay more individuals off, which again reduces consumer confidence, which reduces spending on homes. Foreclosures start to go up as people enter into negative equity and lose their jobs. The cycle continues over and over again. The effect is what you are seeing in the United States.
  24. indy jones from Overpiced Housing, Canada writes: Markets are straight down - won't be much for buyers once the mandatory 5 percent down and max 35 year mortgage kick in -

    Less buyers = prices to drop......GET OUT WHILE YOU CAN !!!!!!!!!!
  25. Ori Ben Zion from Canada writes: Above Centre, you seem to be a proponent of the "Canada-US decoupling theory". I hate to tell you this, but that lame theory went out the window several months ago.
  26. Alastair james Berry from Nanaimo BC, Canada writes: The USA is verging on insolvency............

    I find it interesting, that the US House of Representatives "IN SECRET SESSION", 13 March 08 were told of a meltdown starting in September 2008, culminating in a complete FINANCIAL collapse of the USA in January 2009 when IT WOULD BE INSOLVENT............this to be followed by INSURGENCY....a round - up of dissidents........concentration camps.....martial law.......AND THE ABSORBTION OF CANADA AND MEXICO............and the INTRODUCTION OF A 'NEW' currency to be called "THE AMERO".

    For those who DISBELIEVE THIS........I suggest a GOOGLE SEARCH of the US House of Representatives, SECRET SESSION, March 13, 2008!
  27. Bob Fox from Calgary, Canada writes: Wow, 5 whole percent. That's devastating news. I think there needs to another zero on that for it to mean anything.
  28. Nick Palas from Canada writes: The Real Estate Crash in Canada is accelerating.

    Expect prices to keep dropping. This is the 3rd month in a row that average prices are down in Canada. Once they start going down they keep going and going and going.....
  29. Mario Reis from Toronto, Canada writes: It's not unusual for the housing market to typically drop by 3% or more (check out TREB's market trends) during the months of July and August.

    Combined with the fact that some Provinces are in a "bubble" market, I am not at all surprised and I can predict that the "Volume" of sales will decline, but prices will increase - albeit, less than moderate.

    We'll see modest growth in real estate for the remainder of 2008 and the first have of 2009 (check out rbc's economic reports and globe and mail economic forecasts for 2k9).

    Besides... If you could purchase a home for 1/2 price, would you? I would.
  30. Nick Palas from Canada writes: "Mario Reis from Toronto, Canada writes: It's not unusual for the housing market to typically drop by 3% or more (check out TREB's market trends) during the months of July and August."

    You should learn how to read. The avergage price of a house in Canada declined 5% over last year. So simply put, comparing August 2007 to August 2008 prices were 5% lower this year.
  31. Jonathan T from Canada writes: To the poster above (Mario Reis). I think we all know that this is not a seasonal trend. You can see home prices coming down quite quickly. Listings are way up and buyers have fled. Buyers don't just come running back when prices are dropping especially when affordability is at a historical low.

    In early fall in the UK they media reported that it would be a soft landing for UK real estate because their economy was in good shape. The article read just like the Canadian articles read about 3 months ago. Then by December they thought maybe prices would go down 10% in the worst case scenario. A year later prices have fallen to 12% with no sight of a bottom. Like the US, the poor housing and financial markets have sent their economy into recession. Most economists are now predicting a fall of about 30% over the next three years. When inflation is taken into account, the fall is closer to 45%. It has been reported as the worst housing market they have had in 40 years. I am not trying to scare anyone but be prepared. In 6 months I don't think we will have any optimistic people left in this discussion forum.

    France, Spain, Australia and Canada are now entering into this phase of the housing cycle. Cheap money has increased the tolerance for debt and sent asset prices soaring around the world. These things have a tendency to get corrected.

    To everyone who thinks this is the end of the world (ie baby boomers who would like to downsize and retire) it is not. Home prices will go back up, be it in ten years (assuming inflation remains low). Also keep in mind that high home prices aren't good for an economy. They make everyone very susceptible to interest rate increases. Lower home prices mean that the next generation of Canadians who will be buying a home will actually be able to afford them. This will encourage consumer spending and reduce economic volatility.

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