Canadian Home Prices Rises in June

Article from Business News Network

Canadian home price index rises to record in June

Home prices in Canada rose in June from May, hitting a record high for the third consecutive month, 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 climbed 1.2 percent in June from a month earlier. From a year earlier, the index was up 5.4 percent, but it was the seventh straight month in which year-on-year price gains slowed. No actual prices were given.

None of the 11 metropolitan markets surveyed showed a price decline from the month before. The same was true in May.

The producers of the data noted that the sharpest monthly changes in the index tend to occur in May and June.

A long run-up in house prices and low supply in some markets has sparked concern that a housing bubble may be forming. The federal government has tightened mortgage lending rules four times in four years to try to prevent borrowers from taking on too much debt to buy into the market.

Toronto prices rose 1.6 percent in June, and Montreal prices were up 1.1 percent, the sixth consecutive monthly gain for both cities. In Vancouver, where the market appears to be cooling, prices rose just 0.5 percent.

Prices rose 1.7 percent in Calgary and in Ottawa-Gatineau, 1.5 percent in Winnipeg, 1.4 percent in Quebec City, 1.3 percent in Edmonton, 0.9 percent in Halifax, and 0.7 percent in Victoria and in Hamilton, Ontario.

The index was at a record high in eight of the 11 markets surveyed.

Year-on-year prices were up 9.5 percent in Toronto, followed by Winnipeg, where they were up 7.8 percent. In Vancouver, the 12-month gain dropped below the national average to 3.1 percent, another sign that that once red-hot market is cooling.

The index, which is similar to the U.S. S&P/Case-Shiller home price index, tracks repeat sale prices, so properties with at least two sales are required in the calculations. It lags other home resale data by about six weeks.

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