House prices dip due to dampened consumer confidence

(NC)—During the fourth quarter of 2008, Canada's real estate market posted a decline in both unit sales and house prices, according to the Canadian House Price Survey. The combination of a global economy in recession and shrinking employment figures did much to dampen consumer confidence, diminish home sales and cause house prices to drop.

Of the housing types surveyed, the average price of detached bungalows dipped by 4.8 per cent to $319,640, followed by standard condominiums, which decreased by 5.2 per cent to $233,230, year-over-year. The average price of standard two-storey properties fell by 6.3 per cent to $376,140, year-over-year.

The tumultuous times that characterized the end of 2008 are not anticipated to define 2009. A recent poll commissioned by Royal LePage, www.royallepage.ca, found that almost half (49%) of Canadians surveyed agree that the economic stimulus measures anticipated by the Canadian government will have a positive impact on Canada's real estate market. Political actions taking place south of the border are also likely to buoy the country's economic conditions, as the poll found that 82 per cent of Canadians agree that the inauguration of Barack Obama will have a positive impact on consumer confidence in Canada. “The steady flow of universally dire news that Canadian consumers faced in the fourth quarter has gradually given way to a mixed diet of positive and negative economic indicators,” said Phil Soper, president and chief executive, Royal LePage Real Estate Services.

As consumer confidence levels begin to creep upwards, the country's solid economic fundamentals should lead to a recovery in the housing market. The balance of 2009 should see gradual and continuous improvements as the effects of low mortgage rates along with efforts by governments and central banks to get the economy back on its feet again begin to take hold. - News Canada