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Residential property sales in Canada hold steady but prices fall slightly

Major markets that saw gains compared to June include Edmonton, Montreal, Newfoundland and Labrador. Activity also held steady in Toronto, while Vancouver recorded a small decline.

‘The continued stability in national sales activity shows that homebuyers remain confident about the soundness of investing in a home. Mortgage interest rates are low and keeping home affordability within reach, making it an excellent time for buyers to take advantage of very favourable financing,’ said CREA president Gary Morse.

The actual national average price for properties sold in July 2011 stood at $361,181, which is the lowest level since January, but up 9.3% from a year ago. CREA said this reflects a short lived decline in the average price following the introduction of the HST in British Columbia and Ontario, and tighter mortgage regulations earlier in 2010.

‘Earlier this year, the national average price was being skewed upward by sales in some expensive Vancouver neighbourhoods, but this factor is now diminishing,’ said Gregory Klump, CREA’s chief economist.
‘Upward skewing of the national average price is also shrinking due to overall sales trends in Vancouver, and most recently in Toronto. Their market shares as a percentage of provincial and national sales activity are declining from the elevated levels seen in the first half of the year,’ he explained.

‘Changes in the national average home price are open to being misinterpreted. They often signify changes in the mix of sales activity across and within local markets, rather than a rising or falling price trend for typical homes in a specific market.

‘The national share of sales activity in some of Canada’s more expensive urban centres may retreat further from elevated levels recorded earlier this year, resulting in an easing trend for the national average home price. Even so, the stability of Canada’s housing market will likely continue to stand in stark contrast to further expected volatility in financial markets,’ he added.

Actual, not seasonally adjusted, sales activity came in 12.3 % above national levels reported a year ago. CREA said that this increase reflects weakened activity in July 2010, when levels for the month reached their lowest point since 2002.

A total of 284,537 homes were sold via the Canadian MLS® Systems so far this year. This is 1.6% below levels in the first seven months of last year, and continues to run in line with the ten year average.
The number of newly listed homes edged up by less than 1% from June to July. New listings were down in 60% of local markets, but increased in many large urban centres including Toronto, Vancouver, Edmonton, and Ottawa.

The number of months of inventory stood at 6.1 months at the end of July on a national basis, which is little changed from the end of June. The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of the balance between housing supply and demand.