Canadian Home Prices still Rising in Most Big Cities
Canadian home prices rose in April for the second straight month, with prices up from March in nine of 11 metropolitan markets, the Teranet-National Bank Composite House Price Index showed on Wednesday, although the pace of growth continued to slow on a yearly basis.
The index, which measures price changes for repeat sales of single-family homes, showed overall prices climbed 0.8% in April from a month earlier and a 0.5% gain in March, following a period of three declines in four months. The index was up 5.9% in April from a year earlier after a 6.0% rise in March, extending the slowing trend in recent months.
“Today’s print is still broadly consistent with our overarching theme of a gradual moderation in the housing market,” said Mazen Issa, Canada macro strategist at TD Securities.
The Teranet data also added further evidence to growing regional differences, particularly the divergence between Toronto and Vancouver, which have both seen bidding wars and foreign investment spur a post-recession property boom.
Gains of 0.8% in Toronto and Montreal matched the national average. Smaller increases were recorded in Vancouver — by far Canada’s most expensive property market — and Ottawa-Gatineau, while prices fell in Victoria and in Quebec City.
The data showed the gains were most notable in Halifax, Edmonton, Winnipeg and Calgary.
For Halifax, up 1.6% in April from March, it was the six straight monthly gain, the longest run among the 11 regions surveyed.
The robust housing market and high debt levels to finance home purchases are two of the biggest concerns for Canadian policymakers as the domestic economy recovers from recession.
Higher interest rates will add to debt servicing costs, curbing spending across the economy.
Canada avoided the housing boom and bust that helped trigger the U.S. recession and the global financial crisis. But the record-low borrowing costs that followed have sent prices and sales soaring.
Separately, a survey released by the Canadian Association of Accredited Mortgage Professionals on Wednesday showed Canadian homeowners were comfortable with their current mortgages and focusing on reducing them faster.