OTTAWA - Sales of existing homes cooled in September as they fell 1.4 per cent on a month-over-month basis, the first monthly decline since January, the Canadian Real Estate Association said Wednesday.
The association said sales through its Multiple Listings Service were down in about 60 per cent of all local housing markets last month.
CREA president Beth Crosbie said affordably priced single family homes are in short supply in some of the hottest markets and that contributed to the monthly decline.
"That said, there are other markets with ample supply, but sellers there are holding firm on price," Crosbie said in a statement.
"There is a lot of variation in housing market trends depending on the type of housing, neighbourhood and price segment."
Compared with a year ago, sales were up 10.6 per cent. However CREA said September 2013 had five Sundays, considered to be the slowest day for home sales.
The average price for a home sold last month was $408,795, up 5.9 per cent compared with a year ago.
Excluding the Greater Vancouver and Greater Toronto markets, the average price was $325,406, up 4.5 per cent from September 2013.
The aggregate composite MLS Home Price Index was up 5.28 per cent compared with a year ago.
BMO Capital Markets senior economist Robert Kavcic noted that there were large regional differences in house prices with Vancouver, Toronto and Calgary posting strong gains.
"Conditions get decidedly weaker anywhere east of Toronto, with no city reporting average prices up more than three per cent year-over-year, and fully half below year-ago levels," Kavcic wrote in a report.
"The good news is that the wide disparities in Canada's housing market largely reflect economic, demographic and supply/demand fundamentals at work, all but eliminating any fears of a widespread 'bubble.'"
The number of newly listed homes fell by 1.6 per cent in September compared with August.
CREA said the national sales-to-new listings ratio was 55.7 per cent in September compared with 55.6 per cent in August and within the 40 to 60 per cent range usually described as a balanced market.
The association noted that just over half of all local markets posted a sales-to-new listings ratio in the balanced range.
There were 5.9 months of inventory nationally at the end of September 2014, up slightly from 5.8 months in August.
TD Bank senior economist Randall Bartlett said the lack of listings on the market continued to be a surprise.
"This suggests that home price growth may have more upside room over the next few months," Bartlett said in a report.
"While the housing market continues to defy expectations in 2014, we still remain of the view that housing activity will eventually cool from current levels. With home prices continuing to rise above incomes, affordability will become an obstacle to housing demand once interest rates do eventually begin to rise."
Meanwhile, the Teranet–National Bank national composite house price index posted a monthly increase of 0.3 per cent for September.
The increase came as prices rose in six of the 11 metropolitan markets surveyed including gains in Calgary, Vancouver, Toronto, Halifax, Winnipeg and Quebec City.
Prices were flat in Edmonton and down from the month before in Hamilton, Montreal, Ottawa-Gatineau and Victoria.