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Condo sales plunge in Canada

The latest figures from RealNet Canada Inc show that much of the dramatic decline was in condominium sales which have seen a fall of 77.7% compared with the same period in 2008.

'It's dramatic but that's because it's a more volatile sector and it was a very hot market during the housing boom so typically it is one of the markets you'd see cool off the most,' said Robert Kavcic, a Bank of Montreal economist.

He added tax incentives in this year's federal budget are more likely to benefit homebuyers than condo purchasers.

Stephen Dupois, president of the Building Industry and Land Development Association said that an added reason was that home developers have offered more aggressive discounts.

But he expects house sales to follow suit and pointed out that some areas are already seeing a slowdown.

Sales of existing homes and condos have also declined in the first quarter of 2009. They were down 7% in the first half of April, according to the Toronto Real Estate Board.

However others believe that incentives being offered by developers will help to reverse the downward trend.

'We will start to see the incentive kick in and this should be reflected in an increase in sales for the Spring period,' said Charles Forth from consultants Gorenet.

Brad Lamb, a condominium agent and developer, believes that confidence is returning to the market. 'We very likely hit the bottom as far as consumer confidence goes in December. In past weeks we have seen positive indicators coming out of the US, the stock markets have begun to trade higher and fewer major layoffs have been reported,' he said.

'Combine that with developer incentives and there is a bright ray of hope at the end of what has been a dark tunnel. It will take a while to set in but I think the worst has passed and we just didn't notice,' he added.