National home prices hit by Vancouver slowdown

The average price in March was $369,677, down 0.5% from a year earlier.

But that trend has more to do with last year’s jump in luxury homes sales in Vancouver and the resulting decline in the average since, than it does with an actual decline in Canadian home prices across the board, said CREA Chief Economist Gregory Klump.

“Average prices are up from year-ago levels in most large urban centres,” he said. “The slight decline in the national average price points to a tug of war between Toronto and Vancouver from the standpoint of their sales mix compared to last year.”

Rather than actual prices decline, the average price decline reflects a decline in sales in the higher price bracket.

“The national price was skewed higher last spring by record level high-end home sales in some of Vancouver’s priciest neighborhoods,” said Klump. “It was expected this would not recur this spring, which the latest sales figures confirm. The decline in in average price reflects the change in Vancouver’s sales mix, not housing price deflation.”

Year-over-year average price gains were largest in Prince Edward Island, up nearly 15%, while British Columbia was the only province to see its average home price decline, down nearly 8% from last year.  Ontario average prices are up about 7% in March from last year.

Actual home sales activity was up 1.6% from March 2011, the smallest year-over-year gain since last April.

“The spring housing market is off to a good start,” said Wayne Moen, CREA’s president. “The number of sales and newly listed properties are up from levels last year, and the vast majority of housing markets remain balanced.”

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