TORONTO (Reuters) - Canadian home resale prices edged up in January from December after two months of declines as the big Toronto market showed strength but Vancouver continued to falter, the Teranet-National Bank Composite House Price Index showed on Wednesday.

The index, which measures price changes for repeat sales of single-family homes, showed overall prices rose just 0.1 percent in January from December but were up 6.5 percent from a year earlier. It does not provide actual prices.

Prices increased in seven of 11 metropolitan markets surveyed. Halifax, Nova Scotia, led gains, climbing 0.7 percent, followed closely by the heavily weighted Toronto market, which rose 0.6 percent. Victoria, British Columbia, shrugged off three straight monthly declines to edge up 0.4 percent. Winnipeg, Manitoba, nudged up 0.2 percent - its 11th monthly gain in the past year.

Western markets accounted for most of the declines, with January prices falling 1.1 percent in Edmonton, Alberta. More cooling was seen in the once red-hot Vancouver market, which fell 0.3 percent to log its fourth consecutive monthly decrease. Calgary slid 0.3 percent.

The Teranet data was in line with recent Statistics Canada data that showed new home prices edged up 0.1 percent in January from December, the 10th consecutive monthly increase.

A majority of forecasters surveyed by Reuters in February expected home prices to stall with a mere 0.1 percent climb this year. They forecast the same increase in 2013.

Canadian policymakers and economists have fretted about rising housing prices as household debt levels have soared. The ratio of debt to personal disposable income hit a record 151.9 percent last year.

Ten of the 11 markets surveyed by Teranet showed price increases from 12 months earlier. Leading the way was Toronto, up 9.9 percent, Winnipeg at 9 percent, Hamilton, Ontario, at 7.9 percent, and Vancouver, which jumped 7 percent. Victoria was the only market where prices dropped, falling 0.1 percent.

Teranet said the latest February data from the Canadian Real Estate Association showed "generally balanced" conditions in major urban markets, although there was increased tightening in Vancouver, Victoria, Toronto, Hamilton, Winnipeg and Halifax.

The index tracks home prices over time for repeat sales, so properties with at least two sales are required in the calculations.

The Teranet index is similar to the U.S. S&P/Case-Shiller home price index. It lags other home resale data by about six weeks.

The market has been sustained by ultra-low interest rates since the financial crisis began in 2008, and the Bank of Canada is widely expected to keep its main policy rate at its current 1 percent target until the third quarter of 2013 as global economic growth remains subdued.

Low rates should continue to boost the Canadian housing market, but a more positive global economic outlook could lead to higher rates sooner than forecast, Mazen Issa, Canada macro strategist at TD Securities, said in a research note.

"The implication is that the housing market could correct sooner," he said.

(Reporting by Jon Cook; Editing by Peter Galloway)