The average selling price of a home sold in December rose to $496,500, the Canadian Real Estate Association said Monday, with the group’s house price index slowing to its smallest pace of gains since February 2016.

The average price increased by 5.7 per cent in 2017, but the real estate agent’s group says the average sale price number can be misleading, because it is skewed by high prices and sales volumes in big markets like Toronto and Vancouver.

For that reason, the group says its Aggregate Composite Multiple Listings Service House Price Index is a better gauge of the overall market, because it adjusts for types of housing and other seasonal factors.

But it, too, is showing signs of a slowdown.

The MLS HPI increased by 9.1 per cent in year up to December, showing the eighth consecutive monthly slowdown, and the lowest figure in almost two years.

“The deceleration in price gains largely reflects trends among Greater Golden Horseshoe housing markets tracked by the index, particularly for single-family homes,” the group said.

Sales up

While price gains are slowing, the opposite is happening in terms of the number of sales.

They increased for the fifth month in a row and have now fully recovered from a lull seen in the summer of 2017, CREA said.

December is not typically a strong month for home sales, but December’s number came in 4.1 per cent higher than the same month a year earlier.

“Home sales in December were likely boosted by seasonal adjustment factors and a potential pull-forward of demand before new mortgage regulations came into effect this year” CREA’s chief economist Gregory Klump said.