Average house price in Canada rises 8% to $391,820

The average selling price of a Canadian home was $391,820 in October, up 8.5 per cent compared to last year.

But a closer look at the numbers shows a split between hot markets in the West, and cooler ones in Eastern Canada.

The Canadian Real Estate Association (CREA) said the number of homes sold in October was 8.3 per cent higher in 2013 than it was in the same month a year earlier.

But the growth is almost entirely coming from Western Canada. In terms of total sales volume, the hottest markets this year are Calgary, Edmonton, and Vancouver, BMO economist Doug Porter said in a research note after the numbers were released on Friday morning. 

"All three have reported double-digit volume increases, the only cities in that category," Porter said. "On the flip side, the only three cities with double-digit declines in volumes this year are Quebec City, Saguenay and Halifax (again, all east of Ontario)."

On a provincial basis, B.C. led the country with a 26 per cent increase in sales. There are more strong numbers as one moves east across the country, before starting to decline east of Ontario. 

While strong on an annual basis, compared to the previous month, home sales dipped by 3.2 per cent. CREA chief economist Gregory Klump says the month-over-month dip in sales was evidence that sales in the late summer and early fall were boosted by homebuyers with pre-approved mortgages jumping in the market before rates headed higher.

Now that interest rates appear to be holding, Klump says, sales in the near term may be held in check by homebuyers who are in less of a hurry to buy.

Porter seems to agree. 

"Looking past some of the wild swings [and the wilder headlines] seen in the past year, the broader trends in the Canadian housing market are surprisingly calm," Porter says. "With total sales basically flat versus a year ago so far in 2013 and almost every city sporting a modest, single digit price gain, we can only ask: Where’s the fire?"

The run-up in prices may not be sustainable, but there's evidence that sales volumes are indeed very balanced. So far this year, a total of 402,299 homes have traded hands across the country. That's just 0.2 per cent below levels recorded in the first 10 months of 2012. After rising every year until 2008, annual home sales have been pretty steady since then.

The $391,820 average rose 8.5 per cent from last year. But CREA notes that if the large, active markets of Toronto, Vancouver and Calgary are removed from the equation, the average price increased by 4.9 per cent.