The average price of a house in Canada will decline by 3 percent this year, after a 1.1 percent drop in 2008, experts predicted Tuesday.
The number of residential resale transactions is to decline 3.5percent in 2009, as consumer confidence continues to be dampened by the current economic weakness, according to a report from the Royal LePage Real Estate Services, Canada's largest realty franchiser.
Royal LePage predicted a year ago a 3.5 percent average increase for 2008, but the actual number was 1.1 percent decline.
However, it said real estate activity will pick up in the latter half of 2009 and overall, the field will experience "only modest price and unit sales corrections," and not a crash like in the United States.
Nationally, the average house price is forecast to dip to 295,000 Canadian dollars (about 247,800 U.S. dollars), down from 304,000 Canadian dollars in 2008, which was off from 307,265 Canadian dollars in the peak year of 2007.
"While Canada's housing market is anticipated to continue to move through a period of adjustment over the next six months, we should expect modestly lower home prices, not a U.S.-style collapse, which was brought on by a structural failure of the entire American credit system," stated Royal LePage CEO Phil Soper.
"Our expectation is that as credit spreads narrow and mortgage rates fall, and as the economy bounces back from a very poor fourth quarter 2008 and first quarter 2009, we'll see continuous improvement."
Canada's housing market is quite different from that of the United States, whose collapse "was really a credit-structure failure as much as a correction in housing prices," he said.
"There is no measurable subprime market in Canada, and as a result the forecast impact of foreclosures on house prices and sales activity in Canada is quite negligible," he said.
Source:Xinhua
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