CBC News

The aver­age price of a home sold in Canada hit $324,928 in August, roughly in line with the same month a year ago, the Cana­dian Real Estate Asso­ci­a­tion said Wednesday.

The aver­age price was higher or sta­ble on a yearly basis in two-thirds of the cities where CREA tracks data. On a monthly basis, the aver­age price was slightly lower than the aver­age sell­ing price of $330,351 in July 2010.

It is also the third con­sec­u­tive month that aver­age sale prices have dropped after increas­ing at a tor­rid pace for the pre­vi­ous year.

The num­ber of new list­ings on the agency’s Mul­ti­ple List­ings Ser­vice was more than dou­ble than the num­ber of sales. A 2–1 ratio of list­ings to sales is gen­er­ally viewed as a “bal­anced” hous­ing mar­ket, BMO econ­o­mist Doug Porter noted.

“Ris­ing inter­est rates and a pro­jected slow­down in job growth mean that the Cana­dian hous­ing mar­ket is expected to con­tinue to cool,” CREA pres­i­dent Georges Pahud said.

“A fur­ther tight­en­ing of reg­u­la­tions could neg­a­tively impact Canada’s soft­en­ing hous­ing mar­ket and con­sumer confidence.”

In terms of sales, activ­ity was 4.1% higher, on a monthly basis, in August. It’s the first monthly increase since March and only the sec­ond monthly gain of the 2010 cal­en­dar year.

Activ­ity was up most in Ontario and British Colum­bia, with monthly gains in these two provinces account­ing for most of the improve­ment in national sales activity.

Canada’s real estate mar­ket was abnor­mally active in late 2009 as buy­ers rushed to take advan­tage of low inter­est rates, so yearly com­par­isons are likely to be neg­a­tive for the rest of 2010, the agency warned.

“High sales activ­ity late last year and ear­lier this year bor­rowed from sales this sum­mer and will con­tinue do so over the com­ing months,” CREA econ­o­mist Gre­gory Klump said.

“This makes the return to more nor­mal lev­els of sales activ­ity look like a steep down­ward trend… The hang­over from accel­er­ated home pur­chases is likely to per­sist over the rest of the year.”

MLS list­ings were 1.9% higher dur­ing the month com­pared to July, which pushed inven­tory to 6.9 months at the end of August 2010 on a national basis, down slightly from the seven months of inven­tory at the end of July 2010.

Inven­tory is the term used to describe how long it would take to sell the entire avail­able hous­ing stock at the cur­rent sales.

“While home sales are still nurs­ing a bit of a hang­over from the real estate party in the first half of the year, it looks like con­di­tions are sta­bi­liz­ing,” Porter said.

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