National home prices slid 0.37 per cent lower from October to November, but remain 3.29 per cent higher than a year ago, according to an index compiled by Teranet and National Bank.
"For the first time since February 2009, when the recession was in full swing, prices were down from the month before in 10 of the 11 metropolitan markets surveyed," Marc Pinsonneault, the National Bank economist who works on the index, stated in a release.
A slump in sales is weighing on home prices, which had been on a tear in recent years. On Monday the Canadian Real Estate Association reported that sales over the Multiple Listing Service fell 1.7 per cent from October to November, and were down 11.9 per cent from last November. The continuing slump in activity prompted the association to cut its sales forecasts for both this year and next.
Economists expect prices to soften in 2013. But there are regional variations – a correction is already underway in Vancouver, while Alberta's market is likely to buck the downward trend.
The Teranet figures released Wednesday show that prices in Vancouver were 1.35 per cent lower in November than a year ago, and fell 0.56 per cent from October. They are down 1.05 per cent so far this year.
Calgary was the only major city to show a rise in prices from October, with them increasing 0.4 per cent. Prices in that city are now up almost five per cent from the start of the year.
Toronto's prices slid 0.26 per cent from October, the second month in a row that they've softened. Prior to October they had not declined month-to-month since the end of last year. But they remain 6.34 per cent higher than a year ago.
On a year-over-year basis, the recent rise in house prices in Canada has only been slightly above that of prices in the United States, Mr. Pinsonneault pointed out in a note to clients. He expects that gap to narrow further in the months ahead.
"With the weakness in sales expected to persist, home price inflation is likely to continue to trend down in Canada," he wrote. "If we are right, the unwinding of the real estate wealth effect will be a drag on consumer spending in the coming quarters."