The Canadian housing market continues to soften, with the Teranet repeat sales index last night registering its fifth straight monthly decline, with prices falling by -0.3% nationally over January (see next chart).
Canadian house prices have now fallen by -1.6% since values peaked in August 2012, but remain 25% above their April 2009 low.
The correction has been particularly sharp in Canada’s third biggest city and bubbliest (and most supply-restricted) market – Vancouver – where prices have fallen by -5.1% since values peaked in June 2012. By contrast, Canada’s two largest cities – Toronto and Montreal – have experienced milder corrections, with values falling by -1.5% and -1.7% respectively since peak
Falling house prices aren’t the only problem facing the Canadian economy, however. Recent Statistics Canada releases have revealed that the domestic economy is weakening, with the agency showing wholesale sales declined by -0.9% per cent in December, far worse than expected. Manufacturing sales also fell by over -3% in December, the sharpest monthly fall since the recession of 2009.
To add insult to injury, Canadian home sales fell by -5% in January, housing starts have fallen, and the economy shed -22,000 jobs in January, the first monthly decline since mid-2012.
With the economy weakening, Canadian home prices look set to continue falling over 2013.
