For the first time in four-and-a-half years, the average house price in Canada is lower than it was a year earlier — a clear sign that tougher housing rules and rising mortgage rates are taking a bite out of the once-hot housing market. Declining house prices in Toronto have now spread to cities across southern Ontario, with Hamilton, Kitchener-Waterloo, the Niagara region, London and Windsor all reporting price declines in July, according to data from the Canadian Real Estate Association (CREA). The average house price in Canada was $478,696 in July, down 0.3 per cent from the same month a year earlier. The decline reflects fewer sales in the Toronto and Vancouver regions, CREA said.

Bloomberg via Getty Images Cranes operate at a condominium under construction in Toronto on Saturday, May 27, 2017. The housing price slump in Toronto is spreading to nearby cities.

Nationally, sales are down 11.9 per cent from a year ago, dragged down by an 8.8-per-cent sales decline in Vancouver and a 40.7-per-cent decline in Greater Toronto. In Toronto, the average price of $746,218 is still 5 per cent higher than a year ago. But it has fallen by about 19 per cent since April, when Ontario's government announced a slate of new measures to cool the housing market. Those measures included a 15-per-cent foreign speculator's tax and an expansion of rent controls in the Greater Golden Horseshoe Area, which includes Greater Toronto, Hamilton-Burlington and some surrounding areas. But prices are falling beyond Toronto and its surroundings, with month-to-month price declines in Calgary, Edmonton, Saskatoon, Victoria and Quebec City, among others. In all, 16 of the 26 major markets covered in CREA's report saw price declines in July.

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