UPDATE 1-Canadian existing home sales drop in July for second month -CREA

(Adds regional details, economists' comments)
TORONTO, Aug 14 (Reuters) - Sales of existing homes in
Canada fell in July from June, the second consecutive monthly
decline, as strength in the two big markets of Vancouver and
Toronto could not offset weakness elsewhere, the Canadian Real
Estate Association said on Friday.
CREA, the industry group for real estate agents, said sales
were down 0.4 percent last month from June. Not seasonally
adjusted, they were up 3.4 percent from July 2014.
"The big picture remains little changed in Canada's housing
market, with strong gains in Vancouver and Toronto contrasting
with much softer or more balanced markets across pretty well the
rest of the country," BMO Capital Markets senior economist
Robert Kavcic said in a research note.
CREA Chief Economist Gregory Klump noted that the strength
in Toronto and Vancouver has spread to nearby markets in their
respective provinces of Ontario and British Columbia, with those
two provinces accounting for about 60 percent of national sales.
"These remain the only places in Canada where home prices
are growing strongly," Klump said in the report.
Low interest rates have kept the housing market stronger
than expected despite signs of a slowdown in some markets,
including Canada's oil-industry capital of Calgary, where the
plunge in crude prices has hurt the economy,
The national sales-to-new-listings ratio was 56.8 percent in
July, down slightly from 57.1 percent in June. A ratio between
40 percent and 60 percent is generally consistent with a
balanced market, CREA said.
There were 5.6 months of inventory at the end of July,
unchanged from the previous two months. That measure is at a
three-year low as Canada's prolonged housing boom has drawn down
overall supply.
CREA's home price index, considered a better gauge of home
prices than an average home price, rose 5.9 percent from July
2014, and price gains continued to be led by Vancouver, where
prices were up 11.23 percent from a year earlier, and by
Toronto, where they were up 9.39 percent. Calgary prices were up
just 0.1 percent.
The national average home price in July was C$437,699
($335,504), up 8.9 percent year-over-year. The national average
is upwardly distorted by hot sales activity in Toronto and
Vancouver, where prices are much higher than in other cities.
Excluding Toronto and Vancouver, the average price is a more
modest C$341,438 and the year-over-year gain is reduced to 4.1
percent.
($1=$1.3046 Canadian)