Canadian Home Prices Rise In June, But Pace Slows

Canadian resale home prices rose sharply in June but the pace of 12-month price inflation slowed, the Teranet-National Bank Composite House Price Index showed on Monday.

The index, which measures price changes for repeat sales of single-family homes, showed home prices were up 0.9 per cent nationally last month following a 0.8 per cent increase in May.

Prices were up 4.4 per cent from a year earlier, a deceleration from May’s 4.6 per cent price gain. The report does not provide actual prices. Canada’s housing market has shown strong growth this spring and early summer after brutal winter weather hurt construction, sales and prices. Most analysts expect the market to carry some momentum through 2014 before slowing in 2015, when interest rates are expected to rise.

“At risk of sounding like a broken record, there are reasons to believe that the housing market will eventually cool down in 2015,” Mazen Issa, senior Canada macro strategist at TD Securities, said in a research note.

“Supply in some markets are elevated, so this should constrain the pace of home price appreciation.”

The Teranet data showed that prices rose in seven of 11 markets in June from May, led by a 3.1 per cent gain in Hamilton and a 2.8 per cent rise in Montreal. Gains also included a 0.9 per cent rise in Calgary, a 1.1 per cent gain in Edmonton, a 0.5 per cent increase in Ottawa, a 1.4 per cent rise jump in Toronto and a 1.8 per cent rise in Victoria.

Prices fell in the month in four cities: a 1.2 per cent decline in Halifax, a 0.4 per cent decrease in Quebec City, a 1.0 per cent fall in Vancouver and a 0.6 per cent drop in Winnipeg.

Year-over-year price gains were also seen in seven of the 11 markets surveyed. Prices were up 8.1 per cent in Calgary, 7.3 per cent in Hamilton, 6.1 per cent in Toronto and Vancouver, 3.5 per cent in Edmonton, 1.6 per cent in Victoria and 1.0 per cent in Montreal.

Compared with a year earlier, prices were down 2.5 per cent in Halifax, 1.7 per cent in Ottawa, 2.4 per cent in Quebec City and 0.4 per cent in Winnipeg.

Source: Reuters @ The Globe & Mail

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