Canadian home prices are rising … except Vancouver’s

This Reuters report shows that house prices across Canada are still rising with some notable exceptions, such as Vancouver, where much is being made of the fact that prices dropped in January for the fourth month in a row. Read on, and you’ll see that even with these declines, Vancouver’s prices are still up 7 per cent compared to a year ago.

Here is the article in full:

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 yesterday.

The index, which measures price changes for repeat sales of single-family homes, showed overall prices rose just 0.1 per cent in January from December but were up 6.5 per cent 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 per cent, followed closely by the heavily-weighted Toronto market, which rose 0.6 per cent. Victoria shrugged off three straight monthly declines to edge up 0.4 per cent. Winnipeg, Manitoba, nudged up 0.2 per cent – its 11th monthly gain in the past year.

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

The Teranet data was in line with recent Statistics Canada data that showed new home prices edged up 0.1 per cent 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 per cent 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 per cent 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 per cent, Winnipeg at 9 per cent, Hamilton at 7.9 per cent, and Vancouver, which jumped 7 per cent. Victoria was the only market where prices dropped, falling 0.1 per cent.

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 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 per cent target until the third quarter of 2013 as global economic growth remains subdued.

Source: Reuters

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