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TORONTO, ONTARIO--(Marketwire - May 15, 2012) - Canada's housing market continues to look balanced, but location matters greatly - and fundamentals appear to be driving most local market performance, according to BMO Economics' analysis of today's Canadian home sales numbers for April.

"On a national level, there does not appear to be a housing bubble," said Robert Kavcic, Economist, BMO Capital Markets. "At the regional level, though, things get far more interesting."

The latest figures revealed:

• Vancouver is clearly weakening, with sales down 13.2 per cent year-over-year and about 19 per cent below average levels of the past decade. Average prices are down almost 10 per cent year-over-year but that is overstated by a shifting sales mix with fewer high-end sales.
• Toronto, however, continues to make headway amid tight supply conditions. Sales jumped 14.5 per cent year-over-year, and average prices rose 8.4 per cent year-over-year, with the single-detached segment outperforming the more amply-supplied condo market.
• Calgary is quietly becoming a market to watch. Sales jumped 30 per cent year-over-year in April and are back above the 10-year average for the first time in about three years. Prices have yet to gain much momentum, but supply conditions are tightening rapidly across Alberta.

"If oil prices remain high enough to continue supporting strong economic growth and migration flows, Calgary could again become Canada's real estate hot spot," concluded Mr. Kavcic.

Laura Parsons, Mortgage Expert, BMO Bank of Montreal, noted that with interest rates poised to climb, saving on interest costs over the long term should be high on the priority list for any prospective buyer.

"While interest rates have been at historic lows recently, the inevitable climb looks to be coming as soon as next year. Choosing a fixed mortgage can provide protection against rising rates and make the cost of owning a home more manageable in the long run," said Ms. Parsons. "In addition to choosing a fixed rate, we believe that for Canadians a mortgage that carries a maximum 25-year amortization is the right choice for today's environment, as it helps homeowners build equity in their home faster."

Furthermore, Ms. Parsons noted that on a $400,000 mortgage at a 5 per cent interest rate, choosing a 25 year amortization can save upwards of $70,000 in interest, which Canadians can put directly towards their retirement.

To view Mr. Kavcic's full analysis, please click here.

About BMO Financial Group

Established in 1817 as Bank of Montreal, BMO Financial Group is a highly-diversified North American financial services organization. With total assets of $538 billion as at January 31, 2012, and more than 47,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.