realtor open house housing real estate

The average price of a Canadian home is being skewed upwards by hot markets in Toronto and Vancouver, CREA says. (Carlos Barria/Reuters)

The average price of a Canadian home rose at an annual pace of 8.9 per cent in July to $437,699, the Canadian Real Estate Association says.

But stripping out the two major housing markets of Toronto and Vancouver, the average price drops to $341,438 and the year-over-year gain is reduced to 4.1 per cent, according to CREA.

"It's fair to say that the strength of national sales is still a story about two cities," CREA's chief economist Gregory Klump said.

"Trends in British Columbia and Ontario have a big influence on the national figures, since they account for about 60 per cent of national housing activity.

"These remain the only places in Canada where home prices are growing strongly," Klump added.

The numbers seem to back up CREA's narrative that Canada's housing market is, on the whole, balanced. Of the 26 markets the realtor group tracks, seven are seeing average prices below year-ago levels and six are up in the zero-to-four per cent range.

Economists have taken a close look at Calgary's housing market in recent months, looking for signs of the oil contagion spreading into Calgary's real estate valuations. At the moment, it looks like while the city's housing market is clearly slowing, it's not crashing the way some people had feared. 

"Calgary home prices are effectively flatlining, not correcting more sharply as some feared — stay tuned though with WTI oil prices testing the low $40 [US] range," BMO economist Robert Kavcic noted.

Sales down but still strong

Outside of prices, the realtor group said there were fewer sales in July for the second straight month, but that figure is only down because spring was a record high for home sales. By historical standards, the number of transactions was still high in July.

Sales activity for the three-month period May, June and July as a whole reached its highest monthly levels in more than five years, CREA said.

The monthly decline in July was largely because of a slight downturn in the Hamilton-Burlington and Durham Region areas of Southern Ontario after they hit record levels in June.

The association said Calgary sales were down from July 2014, but remained in line with long-term averages.