09/15/2011 11:29 EDT | Updated 11/15/2011 05:12 EST

Home Prices Show August Increase


Canadians paid 7.7 per cent more for sales of existing homes in August than they did in the same month last year, a real estate group said Thursday.

In its monthly report, the Canadian Real Estate Association said the average sale price for an existing home rose to $349,916 last month from $324,992 in August 2010.

CREA president Gary Morse said the market remained on a "firm footing in August when compared to volatile financial markets."

CREA said the national average price has actually moderated compared to earlier this year, with Vancouver's sales activity — and more recently Toronto — exerting less influence on the average. Vancouver and Toronto's share of provincial and national sales activity reached "unusually elevated" levels earlier this year, but has since pulled back into normal seasonal variations, the group said.

“Once again, economic and financial market headwinds outside Canada are keeping interest rates lower for longer,” said CREA chief economist Gregory Klump. “Those headwinds will likely persist until, and indeed after, fiscal quagmires in the U.S. and Europe are resolved. In the meantime, the Bank of Canada will have ample reason to delay raising interest rates further, which is supportive for the Canadian housing market.”

Nationally, overall year-over-year sales for August were up 15.8 per cent, the largest year-over-year increase since last April, CREA said, but added that the big increase was mainly due to weak activity in 2010.

Between July 2011 and August 2011, sales eased by a seasonally-adjusted 0.5 per cent.