Housing market in transition in Canada

OTTAWA, Feb. 20 (UPI) -- Home prices slipped in January in Canada for the fifth consecutive month, a development not entirely unwelcome, the country's central bank governor has said.

The Teranet-National Bank House Price Index showed prices down 0.3 percent in an 11-city index, the Canadian Broadcasting Corp. reported Wednesday.

Prices fell in seven of the 11 cities tracked, with the exceptions being Victoria, Halifax, Quebec City and Ottawa.

Bank of Canada Gov. Mark Carney in recent remarks said, "real wealth is build through innovation, and it's gained through hard work. It's not through some magical asset inflation."

Carney said he expects the Canadian housing market to remain subdued for the next two years, The Globe and Mail reported.

The pattern is a necessary transition that shifts the country's economy from one driven by exports, rather than by consumer borrowing, Carney has said.

The home price index said prices were up 2.7 percent from January 2012, but the Canadian Real Estate Association said sales activity has declined 5.2 percent in January compared to a year ago.

The association said the decline was due to tighter lending rules pushed by the government.

"We anticipate a further softening in both sales and pricing in 2013," Scotiabank economist Adrienne Warren said in a research note.