B.C. and Alberta markets lead house price slowdown

But year-to-year figures for Victoria show prices are holding steady

With files from Carla Wilson, Canwest News Service
Published: Saturday, July 12, 2008

OTTAWA -- Prices for new homes in Canada rose 4.1 per cent in May from a year earlier, the slowest pace in almost six years, led by weakening markets in Alberta and British Columbia, Statistics Canada said yesterday.

The federal agency said May's weak performance continues "a deceleration that started in September 2006." In April, the year-over-year increase in prices was 5.2 per cent.

"This was the slowest rate of growth since July 2002 when year-over-year prices increased by four per cent," the federal agency said.

Builders reported that higher labour and material costs have pushed prices higher over the past year."

While prices in Alberta and B.C. slowed from their previous highs, Saskatchewan continued to experience the largest increases, with Regina posting a 30.4 per cent annual increase in May.

On a monthly basis, prices in Victoria and Vancouver slipped between April and May. But when examined on a year-to-year basis, Victoria prices held steady and Vancouver builders moved prices up by 2.7 per cent from May of last year.

Signs are pointing to a slowing real estate market in Greater Victoria, where sales numbers are declining while the number of properties for sale are rising.

The average price of a single-family house was $580,104 in June, with the median lower at $538,000.

Surging home prices in recent years have prompted many buyers to start not with a detached house but a condominium instead. Last month's average price for a condo in Greater Victoria was $319,943 and the median came in at $295,000.