Canadian home prices fell in March from year-ago levels even as existing home sales activity picked up, with a cooling of the once-hot Vancouver market offsetting big price gains in Toronto and steady increases elsewhere.
A report on Monday from the Canadian Real Estate Association showed the average residential home price in March was $369,677, down 0.5% from the same period last year. The figures are not seasonally adjusted. But the broad number masked big differences between cities and regions.
The average selling price in Vancouver, Canada's most expensive major market, fell 3.1% from a year earlier to $761,742. Prices in the nearby Fraser Valley area tumbled nearly 10%.
But prices in Toronto, which has seen a boom in condominium construction, jumped 10.5 percent in March from a year earlier.
"The slight decline in the national average price points to a tug of war between Toronto and Vancouver," Gregory Klump, the industry group's chief economist, said in a statement.
Klump added that national prices in 2011 had been pushed higher by "record level high-end home sales in some of Vancouver's priciest neighbourhoods."
The report also showed existing home sales climbed 2.5% in March from February on a seasonally adjusted basis.
But the increase, unadjusted, was up just 1.6% from year-earlier levels. This represented the lowest yearly growth rate since April 2011.
"While it is difficult to see in the monthly data, there is a sense that the housing market is gradually slowing," David Tulk, chief Canada macro strategist at TD Securities wrote in a research note.
"The dynamics of this report show a maturation of the housing market cycle in Vancouver which is likely to be repeated in Toronto over the coming year. Outside of these two markets, the rest of the national market is still holding in reasonably well."
Tulk added that gradually rising Canadian interest rates over the next two years should help slow the market further.
The news should provide some relief to the Bank of Canada, which has warned that rising household debt levels, in many cases the result of large mortgages, are the biggest domestic threat to the economy.
Canada's housing sector never experienced the subprime mortgage boom and bust that drove the United States into recession. And a post-crisis housing market rally, triggered by record low borrowing costs, played a key role in driving the recovery.
But Bank of Canada Governor Mark Carney and Finance Minister Jim Flaherty have both expressed concern about the housing boom, with Flaherty tightening mortgage rules several times to try to cool the market.