OTTAWA -- The Canadian Real Estate Association has cut its forecast for Canadian home sales this year and next and lowered its national average price forecast.
The downgrade announced Monday came as tighter mortgage lending regulations put in place by the federal government helped push August homes sales to their largest month-over-month decline since June 2010.
Sales of previously owned Canadian houses and condos have now gone down in five of the past six months.
"While we always caution that housing market trends at the national level can and do run counter to trends in many local markets, the decline in activity in August was definitely the result of much of the country moving in the same direction," CREA president Wayne Moen said in a statement.
Sales in August slipped 5.8 per cent compared with July and were down 8.9 per cent compared with August a year ago.
In its outlook for the year, CREA said Monday that home sales are now forecast to rise by 1.9 per cent to 466,900 units in 2012, but slip by 1.9 per cent to 457,800 units in 2013.
The revised outlook compared with a forecast in June that suggested 475,800 homes would be sold in 2012, up 3.8 per cent from 2011.
The national average home price is forecast to rise by just 0.6 per cent to $365,000 in 2012 and edge lower by one tenth of one per cent to $364,500 in 2013.
The June outlook forecast prices would rise by 2.2 per cent to $370,700 in 2012.
The new mortgage rules entered in force in July.
Among other changes, Ottawa reduced the maximum amortization terms for government insured mortgages to 25 years from 30.
Read more: Real Estate Association cuts home sales forecast | CTVNews