According to the latest figures, the sales of houses has fallen in Canada in the month of August and many believe that it is due to the impact of the changes in mortgage insurance rules made by the government.

The latest data released by the Canadian Real Estate Association (CREA) shows that the sales have fallen during the summer months and the association has cut its forecast for both sales and prices of housing units in the country.

House sales over the Multiple Listing Service (MLS) system recorded a fall of 5.8 per cent in August compared to the previous month. This is the largest fall in house sales in about two years indicating that the changes to rules made by Finance Minister Jim Flaherty in July have cooled the Canadian housing market.

CREA expects the sales to fall 1.9 per cent to 457,800 units next year under the revised forecasts. CREA said that the housing market will cool in most provinces including Alberta and Manitoba. It also said that Ontario will register the largest decline in country. The average national prices of houses are expected to rise just 0.6 per cent this year, to $365,000 and fall next year to $364,500.