The average home price in Canada’s major markets reached a new high in October, while the number of homes trading hands via the Multiple Listing Service dropped, according to statistics released by The Canadian Real Estate Association.

The average price for MLS home sales climbed 9.8 percent to $275,061 in October from the same month last year to set a new monthly major-market record. Previous monthly records were set in Vancouver, Calgary, Regina, Kitchener-Waterloo and Montreal, and reached its highest level ever for the month of October in all other major markets.

Seasonally adjusted home sales via the Multiple Listing Service in Canada’s major markets totaled 28,627 last month, down 2.7 percent from September when sales reached their second-highest monthly level on record. Transactions remain on track for a new annual record in 2005, with sales activity in the first 10 months of the year up 4.5 percent compared to the same period last year.

Seasonally adjusted sales surpassed all previous records for the month of October in Calgary, Hamilton and Kitchener-Waterloo.

Seasonally adjusted MLS residential new listings of 45,880 units in October 2005 were down by 1.3 percent to compared to September. By contrast to the rise in major-market new listings for the year to date, new listings remain below last year’s year-to-date levels in Greater Vancouver, Calgary and Edmonton. 

“Mortgage rates inched higher in October, which may have pushed some home buyers off the fence and into the market in order to take advantage of favorable pre-approved mortgage rates,” said CREA’s Chief Economist Gregory Klump.

“The Bank of Canada has made it clear that further interest-rate increases should be expected,” he said. “The housing market will become more balanced as expected price and interest-rate increases cause sales to edge lower in 2006. Price gains next year are expected to become more modest as higher interest rates result in slightly softer sales activity and a more balanced market,” he added.

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