BC – House sales come tumbling down

OTTAWA — The flood of grim economic news continued yesterday as the B.C. Real Estate Association reported that home sales tumbled 33 per cent last year.

Residential sales across the province plunged to 68,923 units in 2008, the lowest level since 2000 when 54,179 transactions were posted, the association said.

The average home price in 2008 was $454,599, up 3.5 per cent from 2007.

“The housing market came in like a lion and went out like a lamb in 2008,” said association chief economist Cameron Muir. “Home prices reached a record high in March but edged lower during the balance of the year.” The average home price reached $483,291 in March and then fell 11 per cent to $429,210 by year-end.

Separately, Statistics Canada said new-home prices in Vancouver posted a year-over-year decline of 2.3 per cent in November, the largest 12-month drop since 1999.

As if this wasn’t enough bad news, the Bank of Canada reported yesterday that the mood among Canadian businesses has soured.

“Business sentiment has deteriorated markedly since the autumn survey, as the effects of the international financial crisis and the weak global economy intensified and spread to domestic demand,” the central bank said in its winter survey, noting that almost all indicators of that mood are at their lowest level since it began its quarterly survey more than a decade ago.

“The percentage of firms reporting tighter credit conditions reached a record-high level,” it added.

Companies expect sales to slow over the next 12 months, and the level of uncertainty about prospects has risen, the central bank said.

However, the bank’s survey also found that pressures on production capacity have eased while the pace of price hikes has fallen, reflecting lower commodity prices and reinforcing low-inflation expectations.

TD Securities analyst Charmaine Buskas said this supports the view that the Bank of Canada next week will cut its trendsetting interest rate by another half-point to a record-low one per cent.

The short-term outlook for the global economy weakened considerably as last year was drawing to a close and as unemployment in the industrial countries was rising, the Organization for Economic Co-operation and Development said.

– The U.S. Conference Board warned that Canada’s main export market, which lost 2.5 million jobs last year, could lose two million more in 2009.

Source: The Province

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