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Average property prices in Canada continue to fall

The statistics from the Canadian Real Estate Association show that they fell by 5.1% year-over-year in August, the worst fall since 1996.

It was the third monthly drop since prices fell into negative territory in June for the first time in more than nine years, and was led by a sharp decrease in sales activity in the country's most expensive markets, including Vancouver, Victoria and Calgary.

In Vancouver, the country's priciest housing market, unit sales plummeted by 54% and prices dropped more than 5% per cent from the year before.

Prices also fell in Calgary, Edmonton, and Victoria, cities which saw dramatic run-ups during the housing boom, and in Windsor-Essex, which has been hard hit by the slump in the auto manufacturing sector.

Economists are, however, sticking with the view the housing market decline won't become as dramatic in Canada as in the United States. But they predict a continued slowdown in sales activity and softer prices.

'Canada's housing market continues to face strong headwinds from declining confidence, low affordability and an upward trend in new listings,' said Robert Kavcic, economic analyst at BMO Nesbitt Burns Inc.

Resale home prices continued to rise in some areas but the increase were slight. In Toronto, the country's largest market, they edged up by only 0.8%. Larger price increases were mainly in smaller markets, led by Regina and Newfoundland and Labrador.

'This underscores the current shift in the Canadian housing market, as the tone of activity moves slightly closer to a buyer's market,' said Millan Mulraine, economics strategist at TD Securities Inc.