Sales of existing homes in Calgary have spiralled deeper than in any other major Canadian city in the first three months of this year.

Data released yesterday by the Canadian Real Estate Association show in the first quarter this year, sales of existing homes have plunged 35.9% in Calgary, compared to the same period last year.

Nationally, sales declined 13% in the first quarter leading one economist to declare: "Aside from a few choice Prairie locales, sales are melting faster than this year's snow pack."

But none of Canada's major markets experienced drops quite as dramatic as Calgary's.

Edmonton was the runner-up with a drop of 35.6%.


Add to that a steep increase of almost 30% in new listings in the first quarter (the national equivalent is a 5.1% increase), and you've got the makings of a buyers' market, says Bank of Montreal economist Doug Porter.

Porter said a sales drop, combined with a surge in new listings, is the key ingredient of slowing price increases.

"That sometimes spells poison (for home prices and hence sellers)," he said.

Average MLS resale prices in Calgary have risen about 4.4% between January and March, a far cry from the double-digit increases Calgary experienced in the previous two years.

CREA data shows the average MLS resale price of a Calgary home was $414,838 in the first quarter.

After crunching the CREA numbers, Porter declared "Canada's six-year housing market boom is officially over."

At the same time, however, he cautioned against describing the slowdown, national or provincially, as a looming bust of the national real estate market. It's merely a slowdown, and a retraction from double-digit increases, that has taken some of the steam out of price hikes, he said.

The harsh weather early this year likely played a role in depressing sales, Porter said.

"The real test will be how sales and prices fare in the crucial spring season," he said.

But despite the slowdown, BMO predicts average home prices to grow moderately this year.

"The residential average price continues to increase, unlike conditions in many U.S. markets," said CREA president Cal Lindberg.