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Deborah Baic/The Globe and Mail

The pace of Canadian home sales slowed in February, as a hot Toronto market wasn't enough to balance a sharp Olympic-related decline in activity in British Columbia.

The Canadian Real Estate Association said the seasonally adjusted national home sales totalled 42,799 units in February, 1.5 per cent lower than January.

"Activity decline mostly in Vancouver, but this was partially offset by an equally large gain in Toronto," the association said in a release. "Sales were also down in a number of other B.C. markets. Since there were no significant gains in sales activity elsewhere in Canada, the national figure was pulled slightly lower."

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Association president Dale Ripplinger said the Winter Games in Vancouver likely affected sales in February.

He said March sales will be an important indicator of how the market will fare in the coming months, especially considering the Harmonized Sales Tax which will make real estate transactions more expensive comes into effect in Ontario and B.C. this spring.

Activity is expected to remain elevated in Ontario and B.C. over the first half of the year. Buyers are looking to beat the introduction of the HST and expected interest rate hikes. CREA President Dale Ripplinger

The Bank of Canada is also expected to begin bumping interest rates higher in the second half of the year, which would also make mortgages more expensive.

"Activity is expected to remain elevated in Ontario and B.C. over the first half of the year," he said. "Buyers are looking to beat the introduction of the HST and expected interest rate hikes."

Actual sales across the country, not seasonally adjusted, were 36,275, an increase of 44 per cent from the same month last year. New monthly records were set in Quebec and Ontario.

The average price of all homes sold on the Multiple Listings Service was $335,655, up 18.2 per cent from a year ago. The national weighted average price, which compensates for provincial differences, showed a 15.6 per cent increase year-over-year in February.

The large gains should begin to pull back, because the numbers are flattered by easy comparisons to 2008, when the housing market was mired in the recession.

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"Since a year will soon have elapsed following the recessionary decline and subsequent rebound for the Canadian resale market, year-over-year comparisons are expected to continue shrinking," CREA said.

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