National home sales dropped in November by double digits for the second month in a row to their lowest level since January 2001, and average home sale prices slid by nearly 10 per cent year-over-year, the Canadian Real Estate Association said yesterday.
"The housing market reflects the economic reality in Canada," said CREA president Calvin Lindberg, who added that the decline in housing activity translates into $2.8 billion less in spinoff consumer spending.
November sales decreased to 27,743 units on a seasonally adjusted basis, down by 12.3 per cent from October, the association said. Sales were down from October in 85 per cent of Canada's housing markets.
Prices dropped nationally as well, with the average down 9.8 per cent from a year ago, CREA said.
But a weighted national average price, compensating for more dramatic changes in sales in some provinces, softens the average decrease to 4.7 per cent in November compared with a year ago, the association said.
Year-over-year price declines were seen in higher-priced markets such as Greater Victoria, Greater Vancouver, Calgary and Toronto. Last week, the B.C. Real Estate Association said capital region home prices decreased by 12.5 per cent during that time.
"I'm certainly not confident about anything before spring," said Tsur Somerville, a University of B.C. associate professor and director of the UBC Centre for Urban Economics and Real Estate.
"People's confidence has to turn around" to get the housing market moving again, Somerville said.
Canada Mortgage and Housing analysts are revising earlier forecasts downward for this and next year as sales and starts drop in the capital region.
Travis Archibald, CMHC senior market analyst, said this year's housing starts in Greater Victoria are "probably going to be around 2,000." That's down from an earlier projection of 2,300.
"Most of the drop-off has been in the last couple of months," he said.
The 2009 forecast has not been completed but it is expected to be lower than this year's final figure, Archibald said. The original prediction was for 2,000 housing units to be started next year.
However, Bob Gill, of Pacific Concepts Development Ltd. and president of the Victoria office of the Canadian Home Builders' Association, said he is expecting to be "pleasantly surprised at the beginning of the year, going into spring and summer."
Some developers held off on building homes, and units in projects that went ahead are being absorbed, he said.
The housing market will take some time to recover but it's not as bad as some people think, Gill said. "People will always want to live here."
Steve Copp, past president of the local Home Builders' Association, is also optimistic. He's putting a 48-unit condominium project in Colwood out to tender next month.
Copp is also taking an Esquimalt site to rezoning in the hopes of building 13 townhouses. "I think in the summer and into 2009, it is going to be booming here again."