The number of existing homes that changed hands in Canada during September came in 10.6 per cent higher than a year earlier, topping expectations.

The average sale price rose 5.9 per cent to $408,795.

On a seasonally adjusted basis sales are 1.4 per cent lower than they were in August, which is the first monthly decline since January, according to the Canadian Real Estate Association (CREA), which represents Realtors.

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But sales are still higher than economists predicted. Just before the numbers were released, Bank of Montreal economist Sal Guatieri said that he was expecting sales to be up 6 per cent year over year. And Beth Crosbie, the president of CREA, stated in a press release that she thinks part of the reason for the monthly decline in sales was a shortage of affordably priced single-family homes.

September's reasonably strong showing also comes at a time when many economists have been waiting for sales to slow. But, fuelled by low mortgage rates, the housing market has continued to surprise to the upside and policy makers are keeping an eye on it. Currency strategists at JPMorgan Chase said in a research note on Tuesday that they expect Canadian growth to lag that of the U.S. largely because of slowing housing activity here, but then noted that the slowdown has been elusive. "Recent data has been surprisingly strong, and inconsistent with the Bank of Canada's soft-landing thesis, but we expect it to soften from this autumn," they wrote.

The year-over-year rise in September sales was driven by Vancouver, Calgary, Toronto and Montreal. Sales for the first nine months of this year are 5 per cent higher than they were in the same period last year, and 1.6 per cent higher than the 10-year average for that period.

CREA said that its MLS home-price index, which seeks to create a more apples-to-apples comparison of prices than averages (because averages can be distorted by a change in the types of homes that are selling or higher sales levels in more expensive neighbourhoods), rose 5.3 per cent from a year earlier.

"Price growth has been steady at about five to five-and-a-half per cent since the beginning of the year," it said.

Calgary saw prices rise 10.11 per cent, Greater Toronto 7.82 per cent and Greater Vancouver 5.26 per cent.

"Price gains were fairly flat elsewhere," CREA said.

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Residential average price

Actual (not seasonally adjusted)

SOURCE: CREA