CREA Senior Economist Gregory Klump said the drop in the national average selling price to $361,181 in July, instead, reflects a change in sales activity among different markets, most notably in the recent cooling luxury markets of Vancouver and Toronto.
“Earlier this year, the national average price was being skewed upward by sales in some expensive Vancouver neighbourhoods, but this factor is now diminishing,” Klump said in a statement released Tuesday.
“Upward skewing of the national average price is also shrinking due to overall sales trends in Vancouver, and most recently in Toronto. Their market shares as a percentage of provincial and national sales activity are declining from the elevated levels seen in the first half of the year.”
The national average price in July was up over July 2010 by 9.3%, but the gains primarily reflect softening real estate activity last year after the harmonized sales tax was introduced in British Columbia and Ontario and the federal government tightened up mortgage rules.
Going forward, Klump said there could be further decreases in the national average price, but CREA expects it will ultimately rise to $363,500 by the end of the year.
“The national share of sales activity in some of Canada’s more expensive urban centres may retreat further from elevated levels recorded earlier this year, resulting in an easing trend for the national average home price,” he added. “Even so, the stability of Canada’s housing market will likely continue to stand in stark contrast to further expected volatility in financial markets.”
Actual (not seasonally adjusted) sales remained steady moving from June to July, but made large gains over July 2010, up 12.3%. But this trend, again, reflects the results of low sales in July 2010, which reached their lowest point since 2002.
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