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Property industry expects Bank of Canada to cut interest rates further next week

But official property price figures show that there are large regional variations and some areas are doing much better than others. But experts are warning of a rise in foreclosures in the worst hit parts of the country.

Royal LePage Real Estate Services reported that although the average price of property is falling they are not in as much of a decline as had been feared and some markets have remained resilient in the first quarter of 2009.

The average price of a two storey property fell 6.5% to $379,636, compared to the first quarter in 2008, the company said. But percentage drops for detached bungalows and condominiums, which are both cheaper than two storey property, fell even less.

'We expected a sharper decline in property prices across Canadian markets during the first quarter,' said Phil Soper, president and CEO.

However, the national figure obscures big regional differences, from strong markets in the East and some western cities to small declines in Central Canada and large drops in Alberta and British Columbia.

Even within provinces, prices sometimes moved in different directions. For example, Saskatoon reported drops in all categories of housing, while Regina prices rose. And Ottawa was up, but Toronto fell.

Prices in St. John's rose because corporate investments in Newfoundland and Labrador boosted confidence, LePage said. 'Using house price change as a gauge, Newfoundland is Canada's sole remaining seller's market,' Soper said.

However he predicted that overall property prices will not begin to move up until the economy does and that is unlikely before the first half of 2010.