House prices are expected to see a modest rise this year, but national sales are projected to fall from last year's levels, according to new forecast released Thursday from Royal LePage.

The realtor sees the national average house price is forecast to rise by 3.5 per cent, to $318,000 by the year's end.

However, home sales are expected to decrease by 11.5 per cent to 461,000 unit sales by the end of 2008.

"After several years characterized by a persistent shortage of listings, home buyers have felt the pressure of bidding wars and take-it-or-leave-it counter offers ease during 2008; home sellers have had to come to grips with the longer time it is taking to sell properties, but can take comfort in a market that continues to support reasonable price increases," said Phil Soper, the president and chief executive officer, Royal LePage Real Estate Services.

"Our research indicates that all markets will continue to perform well, albeit at a tempered pace," Soper said.

For the April-June quarter, average prices increased eased back from the big spikes seen in 2006 and 2007. Double-digit increase were seen in Saskatchewan, Winnipeg and St. John's, but rising numbers of houses on the market sent prices in Alberta down.