Steve Ladurantaye Real Estate Reporter

 From Thursday’s Globe and Mail Published on Wednesday, Aug. 04, 2010 1:53PM EDT Last updated on Thursday, Aug. 05, 2010 6:35AM EDT

 The malaise in Canada’s housing market is deepening, as record-low interest rates and a vast selection of homes prove to be insufficient incentives to draw new buyers into the market.

 Just days after the Canadian Real Estate Association downgraded its sales forecast for the rest of the year, data from British Columbia and Alberta show sharp double-digit decreases in the number of homes sold in July compared to a year ago.

 The resale housing market has been at the forefront of Canada’s economic recovery, with prices rebounding sharply from recessionary lows. But the market seems to have peaked, and signs of stress are showing across the country.

 In Vancouver and Calgary, sales were down 45 and 42 per cent, respectively, compared to last July. In Toronto, new condo sales showed a quarter-over-quarter contraction for the first time in 16 years.

 While the CREA typically aggregates information from each of the country’s 101 real estate boards in the middle of each month, the boards can release sales data on their own sooner.

 Vancouver and Calgary reported Wednesday, Toronto is expected to report Thursday.

 All of this slippage is happening while mortgage rates remain at record lows, despite constant warnings from economists that they are bound to rise as the Bank of Canada moves its lending rate higher.

 Competition among the banks for new business along with falling bond yields have meant mortgage rates have been largely unaffected by any Bank of Canada moves.