By Mario Toneguzzi, Calgary Herald September 16, 2011

MLS sales in Calgary rose by 22.1 per cent in August compared with a year ago - a greater year-overyear rate of growth than the rest of the country.

The Canadian Real Estate Association said Thursday that Calgary recorded 1,907 MLS sales for all residential properties during the month for an average price of $394,251, up 2.2 per cent from last year.

New listings in Calgary rose by 11.7 per cent in August to 3,819 and the sales as a percentage of new listings jumped by 4.2 per cent to 49.9 per cent.

In Canada, sales of 39,542 were 15.8 per cent higher than August 2010 and the average sale price of $349,916 was up 7.7 per cent.

New listings in Canada rose by 13.4 per cent to 73,125 and the sales as a percentage of new listings jumped by 1.1 per cent to 54.1 per cent.

"The housing market in Canada remained on a firm footing in August when compared to volatile financial markets," said Gary Morse, president of CREA. "Through their actions, homebuyers are showing that they remain confident about the stability of the Canadian housing market, and recognize that the continuation of low interest rates represents an excellent opportunity to buy their first home or trade up."

Gregory Klump, CREA's chief economist, said economic and financial market headwinds outside Canada are keeping interest rates lower for longer.

"Those headwinds will likely persist until, and indeed after, fiscal quagmires in the U.S. and Europe are resolved," he said. "In the meantime, the Bank of Canada will have ample reason to delay raising interest rates further, which is supportive for the Canadian housing market."

Robert Kavcic, an economist with BMO Capital Markets, said the strongest housing trends in Canada are on the Prairies with Regina, Calgary and Edmonton all up more than 22 per cent year-over-year.

"Prices in Alberta continue to drift sideways, but conditions appear to be gradually firming from what was a large supply overhang after the recession - months' supply was 6.1 in August, still above the five-year average, but down from as high as 8.2 in the middle of last year," he said.

"Note that we're still miles away from seeing the tight conditions of the previous boom, when supply fell as low as 1.2 months worth in Alberta."

Kavcic said Canadian housing remains steady and healthy despite dimming global growth prospects and a sharp drop in consumer confidence.

"Extremely low interest rates appear to be just the medicine as Canadians continue to borrow, and a number of the banks lowered their five-year fixed rates again in recent days, which could continue to lend support," he said.

Francis Fong, economist with TD Economics, said a combination of the recent slowdown in economic activity, the recent implementation of new mortgage lending rules in March, and the high level of household indebtedness has been instrumental in slowing housing activity since the beginning of the year.

"And looking ahead, less favourable economic fundamentals and heightened financial uncertainty are likely to take more wind out of the market's sails."