January 6, 2009

Forecast: Canadian real estate prices fall

A Canadian national realty firm predicts a correction rather than crash in the country's housing sales in 2009 in a report released in Toronto Tuesday.

The Royal LePage 2009 Market Survey Forecast said both national average house prices and the number of homes sold is expected to decline this year.

Nationally, average house prices are forecast to dip by 3 percent from last year to $295,000, while transactions are projected to fall to 416,000 (down 3.5 percent) unit sales in 2009, the company said in its release. The combination of low inflation, reasonable employment levels and improving housing affordability, driven in part by low mortgage rates, are anticipated to stimulate demand in the coming months.

Phil Soper, president and chief executive of Royal LePage Real Estate Services said regardless of the global economic recession, such events in real estate are inevitable.

Most consumers are not aware that nationally, Canadian housing market activity peaked in 2007 and has been adjusting lower since. We are well into this inevitable cyclical correction, he said.