TORONTO - Canadian home prices generally rose in the second quarter and the pace of home-building increased in June, but industry observers say the real estate market is at a "tipping point" and could soon lose steam.

Royal LePage, one of the country's largest real-estate sales organization, said Tuesday that prices for all types of housing were mostly higher in the second quarter compared to both the first quarter of 2012 and the second quarter of 2011.

And prices will likely rise further in some areas, such as Toronto and Winnipeg, the real estate firm added.

But the report suggests some areas are now likely too expensive for buyers at the current levels.

And some of the local markets it tracks showed declines in the second quarter compared with a year ago. Some types of homes in some cities showed lower local average selling prices, such as those in Victoria, B.C., Moncton, N.B., and Saint John, N.B.

"Confidence in Canada's real estate market is sound, but home prices cannot grow faster than salaries and the underlying economy indefinitely," said Phil Soper, the president and chief executive of Royal LePage Real Estate.

"Some regions have reached or perhaps even exceeded the current upper level of price resistance as buyers have embraced an era of historically low mortgage rates."

Interest rates have remained at the current one per cent since September 2010, which has kept fixed mortgage rates low and helped to spur robust buying activity in the market.

But the Bank of Canada and the federal government have warned the low rate environment may have also encouraged some Canadians to take on more debt than they can afford when rates rise.

There have been numerous reports suggesting certain local markets — notably Vancouver and Toronto — and some kinds of housing, particularly condos, are overvalued and primed for a downward correction.

Emanuella Enenajor, an economist at CIBC, says slowing mortgage and consumer debt accumulation indicates that housing prices may dip about 10 per cent over the next year or so.

"Interest rates support demand for housing," said Enenajor. "However, rates are flat. They're not going down. They're stable. And the impact of those stable, low rates is fading."

As prices fall, it's likely that housing starts — which increased last month, particularly in urban areas — will also dip.

"Home builders will look at the prices and that could be a signal to them to slow down the pace of construction," said Enenajor.

Canada Mortgage and Housing Corp. said urban multiple starts, such as condos and apartments, helped housing starts rise to 20,327 units across the country last month, up from 18,494 in June 2011. On a seasonally-adjusted basis, the figure was up to 222,700, from 217,400 in May.

"To some extent it's a reflection of the reality that urban centres are where population growth is happening in Canada," said Enenajor.

"And urban centres are also land-constrained, so you're not seeing a lot of single home building, you're seeing a lot of multiples home building."

Royal LePage's survey found the national average prices for one-storey bungalows, two-storey detached homes and condominiums all went up in the April to June quarter from a year ago.

The national average price for bungalows was $376,311, up from $356,625 in the same quarter of 2011 and $356,306 in the first quarter of 2012.

The national average price for two-storey detached homes was $408,423, up from $390,163 a year-earlier and $398,282 in the first quarter of 2012.

The national average price for condos was $245,825, up from $238,064 in the second quarter of 2011 and $243,153 in the first three months of this year.

Soper said that changes to mortgage rules introduced by Finance Minister Jim Flaherty over the past four years will keep some people on the side-lines, particularly first-time buyers who account for up to half of the transactions.

Flaherty's latest changes — lowering the maximum amortization period to 25-years and reducing the amount Canadians can borrow against their homes — were announced last month and went into effect on Monday.

"The cumulative impact of these new regulations has created a significantly higher hurdle for young buyers seeking their first home and comes at a time when the market was slowing of its own accord. The timing of this intervention was unfortunate," Soper said.

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Earlier on HuffPost:

Here’s the list of most expensive houses for June, 2012.
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  • 12. Vancouver: $18.9 Million

    <strong>4798 Drummond, Vancouver:</strong> Located in Vancouver's posh Point Grey neighbourhood, this house features 15,000 square feet of living space across eight bedrooms, a circular driveway, fountain and gazebo.

  • 12. Vancouver: $18.9 Million

    The circular grand foyer features marble floors. There is also a pool room (with a steam room and sauna), a media room, game room and recreation room. The garage fits eight vehicles.

  • 11. Toronto: $18.9 Million

    <strong>75 Highland Crescent, Toronto:</strong> This house boasts "breathtaking views of the city skyline." There are four bedrooms and six bathrooms in this "smart home" that features "Porsche design" entry systems, security cameras, a power entry gate and a car elevator.

  • 11. Toronto - $18.9 Million

    The house has a walk-in pool and sauna, a hot tub, a games room and a climate-controlled wine cellar. There's also an outdoor sound system with which to annoy your wealthy neighbours.

  • 10. Oakville, Ont.: $18.9 Million

    <strong>2100 Lakeshore East, Oakville:</strong> This six-bedroom house sits on the shores of Lake Ontario in Oakville, near Toronto. Situated on 3.2 acres, it has 185 feet of waterfront and a boat house.

  • 10. Oakville, Ont.: $18.9 Million

    The property features a triple car garage, a foyer of Italian limestone and a two-story living room. Security cameras can be controlled by way of a security panel. And the view from the back-yard pool can't be beat.

  • 10. Oakville, Ont.: $18.9 Million

    Check out this virtual tour.

  • 9. Austin, Quebec: $18.9 Million

    <strong>105 Chemin Fisher, Austin:</strong> The realtor selling this property suggests you may want to build a heliport to get to this 200-acre estate located in a secluded corner of Quebec's eastern townships. There are several houses on this site, the main one being built in 1927. Another building is described as a "three-season chalet" and is located next to the 120-foot dock on Lake Mephramagog.

  • 9. Austin, Quebec: $18.9 Million

    The property features multiple garages, including a 40-foot-long one. The whole place is so ritzy that a <em>barn</em> on the property was declared a historical site.

  • 8. Caledon, Ont.: $19 Million

    <strong>17485 McLaren Rd., Caledon, Ont.:</strong> No fewer than ten bedrooms and seventeen bathrooms in this house in Toronto's cottage country. The terrain features ravines, ponds and rolling farmland. Not to mention a spa, tennis court, pool room and a hobby workshop.

  • 8. Caledon, Ont.: $19 Million

    The realtor boasts that this property has been "in the same family for almost 100 years." One has to wonder whether this was intentional, given how long this estate has been on the market (it was there this time last year as well.) Nevertheless, a fantastic and absolutely classy dining room in this house.

  • 7. Toronto: $19.5 Million

    <strong>346 Riverview, Toronto:</strong> Located in Toronto's prestigious Rosedale district, this six-bedroom, 11-bathroom house sits on a one-acre lot. Fourteen-foot ceilings, a wine cellar and an orangerie are among the features to be found here.

  • 7. Toronto: $19.5 Million

    The modernist interior design is complemented by a basement home theatre, gym and a spa featuring its own sauna and steam rooms.

  • 6. Vancouver: $19.8 Million

    <strong>4880 Drummond, Vancouver:</strong> Yet another house in Vancouver's Point Grey neighbourhood has made this list, this time a 9,000-square-foot mansion featuring seven bedrooms and bathrooms, and a four-car garage.

  • 6. Vancouver: $19.8 Million

    The realtor promises "gorgeous water views" from many parts of the house, including the kitchen. The property features an exercise room and pool room, an extra-large master bedroom suite (also with ocean views), and this home theatre done up in a slightly art-deco style.

  • 5. Vancouver: $19.9 Million

    <strong>5771 Newton, Vancouver:</strong> There aren't too many private homes to be found on the splendidly isolated grounds of the University of British Columbia, but this property near Northwest Marine Drive is one. Seven bedrooms and eight bathrooms in this 12,000-square-foot home.

  • 5. Vancouver: $19.9 Million

    The house features a "bonus wok kitchen," as the realtor describes it, on top of its regular kitchen, and the house in all boasts a games room, professional calibre gym, an indoor pool and granite floors. The patio is big enough to hold a wedding party, according to the realtor.

  • 5. Vancouver: $19.9 Million

    Check out this virtual tour.

  • 4. Toronto: $28 Million

    <strong>1400-155 Cumberland, Toronto:</strong> This condo in Toronto's Yorkville district (the heart of the film festival) is monstrous by apartment standards: 10,000 square feet on two floors. Four bedrooms, five baths and "breathtaking views."

  • 4. Toronto: $28 Million

    All but two of the condo's rooms open on a 5,000-square-foot terrace. The house features a library and a wine cellar, and comes with no fewer than four parking spots -- a heck of a lot by Toronto standards.

  • 4. Toronto: $28 Million

    Check out this virtual tour.

  • 3. Vancouver: $28.8 Million

    <strong>PH01-1011 West Cordova, Vancouver:</strong> This condo may well be located in the most prestigious apartment building in Canada -- no other building has had units featured in HuffPost's "most expensive" lists quite as often as 1011 West Cordova, also known as The Fairmont Pacific Rim.

  • 3. Vancouver: $28.8 Million

    Penthouse 1 is described as the most prestigious condo in the building, and features two levels of living space and multiple patios and rooftop gardens. With only three bedrooms, the condo works out to $9.6 million per bedroom.

  • 2. Vancouver: $31.9 Million

    <strong>3390 The Crescent, Vancouver:</strong> Villa Russe, as this estate is known, is located in Vancouver's Shaugnessy Heights and features six bedrooms (the master bedroom has three dressing rooms), five fireplaces and eight bathrooms.

  • 2. Vancouver: $31.9 Million

    Given how expensive this property is, we're a little surprised the sellers stress walking-distance access to amenities. But in Vancouver, even residents of homes that feature their own greenhouses, heated pools and fish ponds prefer to walk sometimes.

  • 1. Vancouver: $34 Million

    <strong>5365 Seaside Place, West Vancouver:</strong> We thought we'd show you the pool house first, just because it looks so cool.

  • 1. Vancouver: $34 Million

    This house on a peninsula in ritzy West Vancouver features four bedrooms and six baths over 9,000 square feet -- spacious indeed.

  • 1. Vancouver: $34 Million

    Six hundred and fifty feet of natural shoreline on this property.

  • 1. Vancouver: $34 Million

    The house was rebuilt in 2008, and features geothermal heating and integrated lighting and security. The boat house will fit anything up to 40 feet long, and the garage fits five cars.