Article from Tony Wong,
Toronto Star Business Reporter June 14, 2008 Canada's six-year strong real estate market and housing boom is coming to an "eye-catching'' close as sliding consumer confidence kills the party. The number of new listings of homes for sale set a consecutive monthly nationwide record in May, while prices rose by 1.1 per cent annually – the smallest increase in seven years, according to the Canadian Real Estate Association. "Rising food, fuel and home prices are denting consumer confidence," association economist Gregory Klump said. New listings on the Multiple Listing Service hit 54,029 units on a seasonally adjusted basis in May, the most on record and a 2.2 per cent increase over the previous peak in April, according to the real estate association. "The six-year housing boom has indeed fizzled and the poor winter results were not just weather and holiday related," BMO Capital Markets analyst Robert Kavic said in a note. "The breadth of the declines is eye-catching." Nationally, the average price of a home is $337,071. With an increase of 1.1 per cent, prices are rising at a pace below the inflation rate. Sales were also down by a significant 16.9 per cent from last May at 35,040 units. The association says western provinces, which have seen blistering price appreciation, have finally begun to cool. "Canada's housing boom is over, and the days of 40-per-cent-plus price appreciation in Alberta are behind us," says Kavic. In Edmonton, average house prices are down 4.8 per cent, while Calgary house prices are down 2.4 per cent year over year. House prices were also down 5.5 per cent in hard-hit Windsor, where auto layoffs have taken a toll. In the Toronto market, listings were up 15 per cent in May, as sales continued a five-month slide. However, prices are still up a moderate 4 per cent year over year. Meanwhile, an uncertain economy means the market is not expected to pick up anytime soon. "Increasingly cautious home buyers may keep listings on the market longer before being sold, which increases the importance of realistic pricing," Klump warned. | 
