* RE/MAX sees home prices flat in 2012, up 1 pct in 2013
* Sees sales down 1 pct in 2012, flat in 2013
* Economic strength seen boosting sentiment in late 2013
By Andrea Hopkins
TORONTO, Nov 14 (Reuters) - Canada's housing market is leveling off but economic strength, immigration and low interest rates will prevent a steep correction and keep prices and sales mostly flat in 2012 and 2013, real estate agency RE/MAX said on Wednesday.
In its 2013 outlook, based on a survey of trends in 26 markets, RE/MAX said it expects national sales to fall 1 percent in 2012 and then hold steady in 2013, while prices will be flat in 2012 and edge 1 percent higher in 2013.
"Despite all the negativity surrounding residential real estate, the sky is not falling," Gurinder Sandhu, regional director of RE/MAX Ontario-Atlantic Canada, said in a statement.
"Home sales have moderated, but remain within healthy levels. Greater optimism is expected to return next year as the economy marks further improvement," he added.
Canada's housing market, which roared higher in 2011 and the first half of 2012, started to slow after the government tightened rules on mortgage lending in a bid to cool the market and prevent home buyers from taking on too much debt.
RE/MAX forecast some 454,000 homes will change hands in 2012, 1 percent short of the 2011 boom level of 456,749, and hold steady at 454,000 units in 2013.
The average price of a Canadian home is expected to be C$364,000 ($363,500) in 2012, on par with the 2011 figure, while values are expected to appreciate nominally in 2013, rising 1 percent to C$366,500.
RE/MAX said the tightened mortgage rules, the last round of which came into effect in July, have had a major impact on housing markets, pushing home ownership beyond the grasp of many first-time buyers.
But it said an expected improvement in Canada's economy in the second half of 2013 will bode well for housing, along with historically low interest rates. Immigration and population growth are also providing a floor for the market, it said.
RE/MAX did note regional disparities, with Vancouver experiencing the sharpest pull-back in sales, while strength remained in the resource-rich western provinces of Saskatchewan and Alberta, and in the eastern province of Nova Scotia.