Average home prices in July were lower than they were in June, but sales numbers and average prices are still up sharply compared to the same month a year ago, new data showed Tuesday.
The Canadian Real Estate Association said the national average price for homes sold in July 2011 stood at $361,181, which is the lowest level since January. In June, the average price was $372,700. Despite the slowdown, prices have nonetheless gained 9.3 per cent in the past 12 months.
"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's chief economist Gregory Klump said. “Upward skewing of the national average price is also shrinking due to overall sales trends in Vancouver, and most recently in Toronto."
The pullback was expected, as most economists have been forecasting for months that prices and sales will moderate somewhat through 2011 after an exceptional run following the recession that ended in 2009.
"Sales should ultimately find support from a continuation of exceptionally low borrowing costs," Bank of Montreal economist Doug Porter said in a note Tuesday morning.
Sales activity, meanwhile, was flat on a monthly basis (up by less than one per cent) but it came in 12.3 per cent above national levels reported in July 2010. The large gain is a bit misleading because it came against an oddly low comparison point: Sales activity in July 2010 was the lowest it's been since 2002.
In a separate release Tuesday, CREA updated its forecast for the housing market as a whole. The agency now expects 450,800 homes to change hands across Canada this year, an increase of less than one per cent from their last forecast in May.
Sales are forecast to then slip to 447,700 units in 2012.
CREA also expects the average price of a sold home will be $363,500 through 2011 as a whole. That's slightly higher than the July figure, but well below some of the monthly averages seen so far in 2011.