Canada's hot housing market cooled in January, the Canadian Real Estate Association announced Wednesday, with home sales down 4.5 per cent from the month before.
The decline was the first for monthly sales activity since August 2011, and the biggest monthly decline since July 2010, the agency said.
According to the figures, the national average home price went up by a mere 1.2 per cent year-over-year in January, one of the smallest increases since late 2010. The national average home price for the month was $348,178.
"The national housing market is stabilizing and remains well balanced," CREA president Gary Morse said in a statement.
"That said, forecasts for economic and job growth going forward vary widely for different parts of the country, suggesting a possible continuation of a softening trend in some markets, as well as the potential that demand will pick up based on strong fundamentals in others."
The report pointed out that home sales were down in more than half of all local markets in January compared to the month before, most noticeably in the Greater Toronto Area and Montreal. Sales also slowed in Ottawa, Winnipeg, Edmonton, Calgary, Vancouver and the Fraser Valley.
The number of new listings in January was down 1.4 per cent from December, a drop largely seen in Canada's urban centres.
Some good news from the report indicated that sales activity was up 4 per cent over last January, and January sales were close to the five- and ten-year average for the month. However, January's year-over-year sales represented the smallest increase since last May, the report said.
The data followed word from the Canada Mortgage and Housing Corp. on Monday that it expects the country's housing market to remain stable over the next couple of years.
The CMHC said slow economic growth with help keep home prices, and sales figures, in check in 2012.
Mathieu Laberge, deputy chief economist at the agency, said in a statement that low interest rates will keep buyers in the market, but the slow economy will put a damper on any price hikes.
"With the Canadian economy set to expand at a moderate pace and mortgage rates expected to remain low, activity levels in 2012 in both new home construction and sales of existing homes will stay close to levels seen in 2011," Laberge said.
With low interest rates fuelling a hot housing market, home prices across the country have been soaring, leading economists to sound the alarm of a possible crash.
But last month, BMO economists Sherry Cooper and Sal Guatieri issued a report suggesting Canada may avoid a serious crash. Their analysis said most markets will cool rather than collapse over the next couple of years, with the exception of Vancouver and surrounding areas.
