The average national price of homes sold in Canada fell three per cent to $361,181 in July from June, but it was up 9.3 per cent from the same period a year earlier, the Canadian Real Estate Association says.
The CREA said the year-over-year increase reflects a decline in the average price following last summer’s 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,” CREA chief economist Gregory Klump said in a release. “Upward skewing of the national average price is also shrinking due to overall sales trends in Vancouver, and most recently in Toronto.”
The retreat is expected as economists have been forecasting that prices could soften or stabilize in the short term because of moderate interest rate hikes anticipated in the next two years.
The CREA also revised its forecast for home sales activity, which is now predicted to reach 450,800 units in 2011, up less than one per cent from levels in 2010. The organization had previously forecast a decline of about one per cent this year.
National sales activity is forecast to ease 0.7 per cent to 447,700 units in 2012.
The national average home price is forecast to rise 7.2 per cent in 2011 to $363,500, up from a previous forecast, reflecting continued strong price growth in Vancouver in the second quarter of 2011 and acceleration in prices elsewhere, particularly Toronto.