Canadian home prices have started to trend downwards in several major Canadian cities, including Montreal, Winnipeg, Calgary and Hamilton, Ont.

The Teranet House Price Index rose 0.2 per cent in January for all of Canada, following declines in December and January.

But it makes little sense to talk about an overall Canadian housing market, because the pattern is so uneven across the country. Just a few strong markets continue to see rises in resales of single-family homes.

The two biggest urban markets — Toronto and Vancouver, which have a shortage of single family homes available for resale, remained strong in January. On an annual basis, home prices were up 7.4 per cent in Toronto and up 5.1 per cent in Vancouver.

Both cities are strong immigrant destinations, with strong demand for housing. Toronto could benefit from a resurgent exporting sector in Ontario which could boost job opportunities.

Edmonton saw gains of 6.1 per cent on the year and 0.3 per cent this month, remaining strong despite declining oil prices.

But Hamilton and Calgary, second only to Toronto in the annual gain in housing prices, saw a drop in January, by 0.3 per cent in Hamilton and 0.6 per cent in Calgary.

That echoes the forecast of the Calgary Real Estate Board, which expects a drop in sales this year as oil prices start to drive down Alberta incomes and affect the employment picture in the city.

Hamilton, which has been one of the country’s hottest markets for two years, saw prices rise 7.2 per cent since last year, but fall by 0.3 per cent in January.

Other markets are well into a downswing in prices.

Teranet National Bank analysts said the price behaviour in Ottawa, Montreal, Quebec City and Halifax was “consistent with buyer’s-market conditions.”

New home construction down

Statistics Canada new building permit data released today underscores a potential slowdown in real estate construction.

In the residential sector, the value of permits was unchanged at $4.4 billion in December, following a 2.5 per cent decrease in November.

Construction of multi-family dwellings, such as condos, fell by 9.5 per cent to $1.8 billion, a second consecutive monthly decrease

Ontario, Saskatchewan and Manitoba all registered declines in new residential construction, but there were increases in Alberta and British Columbia.