Average house price rose 8% in May to over $450K

The average sale price of a Canadian home has eclipsed $450,000 for the first time, the Canadian Real Estate Association says.

The realtor group said Monday that the average resale price increased by 8.1 per cent in the 12 months up to May, to$450,886.

But beyond prices, the group also said the volume of sales wasred hot.The number of homes sold was 3.1 per cent higher in May than it was in April, the fifth straight monthly increase. Although traditionally a strong month for housing, May was the busiest month for home sales in more than five years.

Strong activity was widespread, and even markets that have shown recent signs of weakness rebounded.CREA chief economist Gregory Klump says a rebound in sales in Calgary and Edmonton suggests uncertainty stemming from low oil prices could be easing.

That rush to buy could have been in part caused by people rushing to get in ahead of new CMHC rules that will hike mortgage default insurance premiums for buyers with less than 10 per cent down, which came into effect on June 1.

"Some buyers may have jumped off the fence and purchased in May to beat the increase," CREA presidentPauline Aungersaid."It's one of the factors that could have affected sales last month."

Toronto & Vancouver still red hot

On the price side, CREA continued to stress that exceptionally hot markets in Toronto and Vancouver are skewing the national average price higher. If those two cities are stripped out of the numbers, the average Canadian home was worth$344,988 in May, a year-over-year gain of2.4 per cent compared to the same time 12 months ago.

Outside of those two big cities, gains were lower.Fraser Valley, Victoria, and Vancouver Island prices all recorded year-over-year gains of about four per cent in May, CREA said.

Price gains in Calgary continued to slow, with a year-over-year increase of just 1.21 per cent in May. This was the smallest gain in more than three years

Prices held steady on a year-over-year basis in Saskatoon and Ottawa, rose slightly in Greater Montreal and fell by about three per cent in Regina and Greater Moncton.

"We expect the regional divide to continue," TD Bank economist Leslie Preston said. "While sales in oil-related markets of Edmonton and Calgary have risen off their January lows, price gains remain modest. The Vancouver and Toronto markets should cool slightly on higher interest rates," she noted.