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ECONOMIC DOWNTURN AND DAMPENED CONSUMER CONFIDENCE CAUSED HOUSE PRICES
TO DIP DURING FOURTH QUARTER

Poll indicates today’s federal budget announcement, Obama inauguration anticipated to buoy optimism

During the fourth quarter of 2008, Canada’s real estate market posted a decline in both unit sales and house prices, according to a House Price Survey released today by Royal LePage Real Estate Services.  The combination of a global economy in recession and shrinking employment figures did much to dampen consumer confidence, diminish home sales and cause house prices to drop.Of the housing types surveyed, the average price of detached bungalows dipped by 4.8 per cent to $319,640, followed by standard condominiums, which decreased by 5.2 per cent to $233,230, year-over-year. The average price of standard two-storey properties fell by 6.3 per cent to $376,140, year-over-year.While national average house prices decreased, price trends varied dramatically across regional real estate markets.  Bolstered by strong local economies, the housing markets in Regina and St. John’s posted double-digit year-over-year price appreciations, while the larger cities that have seen the greatest increase in prices this decade, including Toronto, Edmonton, Calgary and Vancouver, recorded declining house prices.

The tumultuous times that characterized the end of 2008 are not anticipated to define 2009. A recent poll commissioned by Royal LePage found that almost half (49%) of Canadians surveyed agree that the economic stimulus measures anticipated as part of today’s Canadian federal budget announcement will have a positive impact on Canada’s real estate market. Political actions taking place south of the border are also likely to buoy the country’s economic conditions, as the poll found that 82 per cent of Canadians agree that the inauguration of Barack Obama will have a positive impact on consumer confidence in Canada. 

“The steady flow of universally dire news that Canadian consumers faced in the fourth quarter has gradually given way to a mixed diet of positive and negative economic indicators,

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