House prices and sales continued to slide across Canada in February compared to the same time last year, but activity was up for the first time since September.
The Canadian Real Estate Association said Monday that resale home prices fell 9.2 per cent across Canada last month to an average of $281,972.
Sales fell 31 per cent to 25,373 units in February, the smallest year-over-year decline since October 2008. Seasonally adjusted sales fell 26.8 per cent.
The association, known as CREA, also said the number of homes that traded hands on the multiple listing service, or MLS, was up 8.6 per cent above seasonally adjusted levels in January.
"It looks like the Category 5 hurricane which had been pounding the home resale market has been downgraded to `just' a Category 4," BMO Capital Markets economist Douglas Porter said Monday.
But Porter said he expects prices to continue to fall in the months ahead.
"Even with a moderate improvement in February home sales from the exceedingly weak levels around the turn of the year, it's still a clear-cut buyer's market in most regions of the country. And, that doesn't look likely to change any time soon."
CREA said February's average price is being skewed lower in large part by fewer sales in British Columbia, Alberta and Ontario "where homes are more expensive and demand has softened most."
The weighted average, which compensates for larger swings in sales activity in some provinces, was down 5.3 per cent year-over-year.
For instance, February sales fell the most in British Columbia, down 46.5 per cent to 3,653 units compared to last year, followed by drop of 32.1 per cent in Saskatchewan to 628 units and down 29.8 per cent to 3,231 units in Alberta.
Sales in Ontario, which has the largest housing market in the country, fell 29.2 per cent to 9,861 units year-over-year in February.
Prices also fell the most in B.C., at 12 per cent to $421,023, followed by a 9.2-per-cent drop in Alberta to $326,785. Prices in Ontario fell 6.2 per cent last month to an average $284,843.
Prices rose 29 per cent to $195,072 in Newfoundland and Labrador, but sales there fell 17.2 per cent to 197 units.
CREA also said 28,669 homes traded hands on the MLS last month, up 8.6 per cent from January, "the first monthly increase in activity since September 2008."
Monthly seasonal increases in activity were largest in British Columbia at 14.4 per cent, Nova Scotia at 12.7 per cent and Alberta at 11.9 per cent. Ontario and Quebec were on par with the national increase.
CREA president Calvin Lindberg said the market typically picks up in February and into the spring, but that this year buyers are being lured by historically low mortgage rates and increased affordability.
"Realtors are reporting increased interest especially from first time home buyers," Lindberg said.
Ottawa recently announced incentives for first-time home buyers including an increase in how much they can withdraw from their RRSPs from $20,000 to $25,000, as well as a tax credit of up to $750 to help cover closing costs.
CREA said the supply of homes for sale remains high, but has been trending lower. New national listings fell 10.9 per cent from the same month one year ago and are down 11.4 per cent from their peak reached in May 2008.
"The housing supply is expected to continue easing, but it will take time before it realigns with lower demand," said CREA chief economist Gregory Klump.
"Economic uncertainty is keeping home buyers in a cautious mood, so homes are taking longer to sell than in recent years."
CREA said seasonally adjusted residential dollar volume for MLS sales totalled $8 billion in February 2009, an increase of 7.2 per cent from the previous month.
"Consumer confidence will continue to be depressed by a barrage of negative economic news in the months ahead," said Klump.
"Heightened job insecurity will keep many potential home buyers on the sidelines. Those who are confident about their job situation will benefit from improving affordability in a number of housing markets."
