Home sales in Canada fell month on month at the beginning of 2017 while prices were almost unchanged in January compared to a year ago, the latest index data shows.

Sales fell nationally by 1.3% compared to December 2016 but actual, not seasonally adjusted, activity was up 1.9% year on year, according to the figures from the Canadian Real Estate Association (CREA).

The actual, not seasonally adjusted, national average price for homes sold in January 2017 was $470,253, up just 0.2% from January 2016, the data also shows while the number of newly listed homes dropped 6.7% month on month.

It means that sales in January were at the second lowest monthly level since the autumn of 2015 and only slightly above levels recorded last November when recently tightened mortgage regulations came into effect.

Sales activity was down from the previous month in about half of all local markets, led by three of Canada’s largest urban centres: the Greater Toronto Area (GTA), Greater Vancouver and Montreal.

While sales were up from year-ago levels in about two thirds of all local housing markets including in the GTA, Calgary, Edmonton, London and St Thomas, and Montreal, they were down significantly in the Lower Mainland of British Columbia.

A breakdown of the figures show that prices for two storey single family homes recorded the strongest year on year growth with a rise of 16.8%, followed by townhouses and terraced home up 15.8%, one storey single family homes up 14.4% and apartments up 13.3%.

But there is considerable price variation depending on location. In the Fraser Valley and Greater Vancouver prices have receded from their peaks posted in August 2016 but are still higher than a year ago by 24.9% and 15.6% respectively.

Meanwhile, benchmark prices continue to climb in Victoria and elsewhere on Vancouver Island together with Greater Toronto, Oakville-Milton and Guelph. Year on year price gains in these five markets ranged from about 18% to 26% in January.

By comparison, home prices were down 2.9% year on year in Calgary and by 1% in Saskatoon. Prices in these two markets now stand 5.9% and 4.3% below their respective peaks reached in 2015.

Home prices were up year on year in Regina by 3.8%, in Ottawa by 3.7% and in Greater Montreal by 3.1%. In Greater Moncton, home prices for the market overall held steady with a marginal fall of 0.2% but townhouse prices increased by 5.8%.

The national average price continues to be pulled upward by sales activity in Greater Vancouver and Greater Toronto, which remain two of Canada’s tightest, most active and expensive housing markets.

That said, Greater Vancouver’s share of national sales activity has diminished considerably over the past year, giving it less upward influence on the national average price. The average price is reduced by almost $120,000 to $351,998 if Greater Vancouver and Greater Toronto sales are excluded from calculations.

‘Canadian home buyers face some challenges this year, including new mortgage rules that make it harder to qualify for a mortgage and regulatory changes that will push up mortgage financing costs,’ said CREA president Cliff Iverson.

CREA chief economist Gregory Klump pointed out that a shortage of homes available for sale has become more severe in some cities, particularly in and around Toronto and in parts of British Columbia.

‘Unless sales activity drops dramatically, the outlook for home prices remains strong in places that face a continuing supply shortage,’ he said.

New listings were down in about two-thirds of all local markets, led by the GTA and environs across Vancouver Island. With the monthly decline in new listings surpassing the decline in sales, the national sales to new listings ratio jumped to 67.7% in January compared to 64.0% in December and 60.2% in November.

A sales to new listings ratio between 40 and 60 is generally consistent with balanced housing market conditions, with readings below and above this range indicating buyers’ and sellers’ markets respectively.

The ratio was above 60% in about half of all local housing markets in January, the vast majority of which are located in British Columbia, in and around the GTA and across southwestern Ontario. A monthly decline in newly listed homes further tightened housing markets that were already in sellers’ market territory.

The number of months of inventory is another important measure of the balance between housing supply and demand. It represents how long it would take to completely liquidate current inventories at the current rate of sales activity. There were 4.6 months of inventory on a national basis at the end of January 2017, unchanged from December 2016 and a six year low.

National Home Prices in Canada Unchanged in January As Sales Fell by Property Wire