UPDATE 1-Canada new home prices increase by 0.2 percent in August

Thu Oct 11, 2012 8:37am EDT

OTTAWA Oct 11 (Reuters) - Prices of new homes in Canada rose by 0.2 percent in August, the 17th consecutive month-on-month increase, on continued strength in large cities such as Toronto and Calgary, Statistics Canada said on Thursday.

The advance was greater than the 0.1 percent gain forecast by market analysts.

Prices for new homes in the combined Toronto-Oshawa metropolitan region - which accounts for 26.6 percent of the entire Canadian market - increased by 0.3 percent in August over July. Prices in Calgary also rose by 0.3 percent.

Overall, new housing prices increased in 10 metropolitan areas, were unchanged in nine and fell in two. Prices in August 2012 increased by 2.4 percent from August 2011, compared with the 2.3 percent year-on-year advance recorded in July 2012.

The Canadian government, which imposed tighter mortgage rules earlier this year, and the Bank of Canada have long expressed concern the housing market might overheat. The new housing price index excludes condominiums, which the government says are a particular cause for concern.

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