05/15/2012 11:16 EDT | Updated 07/15/2012 05:12 EDT

Canadian Home Prices Flatten In April

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The average selling price of a Canadian resale home was a little less than one per cent higher in April compared to the same month a year ago.

The average home sold for $375,810 across the country in April, the Canadian Real Estate Association said Tuesday, a rise of 0.9 per cent from the same month last year.

But the volume of homes sold was significantly higher.

April home sales were 11.5 per cent higher than where they were the same month a year ealier. CREA said that's partly because sales in April 2011 were lower after buyers rushed to buy the month before ahead of new mortgage rules.

A total of 157,804 homes have been sold across Canada this year, an increase of 6.4 per cent over the first four months of 2011.

As has been the case for several months, activity in two of Canada's largest housing markets, Toronto and Vancouver, is disproportionately skewing the national averages.

"It bears repeating that the national average price was skewed higher last spring by record level, high-end home sales in Vancouver’s priciest neighbourhoods, and that a replay of this phenomenon was not expected this year," CREA's chief economist Gregory Klump said.

"Sales data confirm that high-end activity in Vancouver is well off the peak levels reached at this time last year, which is exerting a gravitational pull on the national average price."

Prices in the Greater Vancouver area came in 9.8 per cent below the level of a year ago, a fourth contraction in home prices in five months and the largest drop the region has seen since the recession, TD Bank economist Diana Petramala noted.

At the same time, activity in Toronto is stronger this spring than it was last spring.

"Higher-priced sales activity there is on the rise and buoying average prices," Klump said. "As the most active housing market in Canada, Toronto is the biggest factor supporting national average price."

If data from Vancouver and Toronto are stripped out of the equation, the national average price is up by 3.1 per cent.

"With mortgage rates still at rock bottom through the early part of this year and job creation heating up through March and April, it’s not that surprising to see continued growth in Canadian home sales," Petramala said.

"Absent of an external negative economic shock, Canadian housing demand should remain supported by a continued low interest rate environment through 2012."

TD Bank is expecting home prices to appreciate by about two per cent in 2012, a slowdown from gains of seven per cent in each of the past two years.

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