Canada's Home Prices Continue To Plummet

November 11, 2008 1:03 p.m. EST

Toronto, Ontario (AHN) - The Canadian Real Estate Association reversed its August forecast of future home prices, reflecting the continuous slump of the country's housing sector. From an average previous resale price of $320,200, a typical house is expected to now sell on average for only $297,600 in 2009, the association said.

Because of the continuing depressed home values, sale of houses is expected to drop in 2008 and 2009. Gregory Klump, CREA chief economist, explained the problem in a statement.

"Canadian economic growth is being sideswiped by financial market turmoil, slowing world economic growth and weaker commodity prices," Klump said.

Low values have caused 1,435 properties to be withdrawn from the Westside Vancouver market. A majority of homeowners have decided to postpone selling their units until prices improve since they had already slashed prices, but there are still no buyers.

On a national scale, existing home sales are expected to drop by 12 percent in 2008 and to go down by 3 percent in 2009, CREA said.