"The best days are behind us now," said Sébastien Lavoie, an economist with Toronto-Dominion Bank. "The resale market in Canada remains in good shape over all but it's undergoing a soft downtrend. That said, there's not going to be any major correction or crash. It's just taking baby steps down."

More than 45,000 homes were listed for sale in July, up 7.5 per cent from a year earlier.

Alan Tennant, president of CREA, said that trend will continue throughout the year, creating a better balance between supply and demand in the market.

"The calming effect of the market will offer consumers a little more selection," Mr. Tennant said. "Buyers [can] look for that perfect property, while sellers have to be a little more careful about pricing."

There was major fluctuation in the housing market across the country in July.

Vancouver suffered most, as just 2,802 houses were sold in the month, down more than 26 per cent from a year earlier. Home sales in Vancouver totalled $1.45-billion, down nearly 12 per cent.

Meanwhile in Regina, the number of homes sold soared nearly 40 per cent in July, while the average price of a home jumped more than 13 per cent to $137,195 compared with a year earlier.

"Rural Saskatchewan is dying and Regina and Saskatoon are the benefactors," said Terry Hincks, a realtor with Century 21 in Regina. "The economy is doing quite well here and I think people see value in this city. It has some of the lowest house prices in Canada."

The energy boom continues to bode well for the housing market in Alberta.

In Edmonton, existing home sales jumped 21 per cent, totalling more than $500-million. Although the number of homes sold in Calgary declined in July, average house prices shot up more than 45 per cent compared with a year earlier, recorded at $357,831.

The average resale price has climbed 11.5 per cent in Canada compared with last year. Mr. Lavoie said that rate should slow to 5 per cent in 2007.

Source: Globeandmail.com