* Home prices rise 0.9 pct in August from July
* Up 5.4 pct from year earlier
* Consumer confidence falls, 5th decline in 6 months
By Andrea Hopkins
TORONTO, Oct 26 Canadian home resale prices hit
a record high in August, their ninth consecutive monthly gain,
but consumer confidence fell for the fifth time in six months,
highlighting Canada's two-speed economy and cloudy outlook.
The Teranet-National Bank Composite House Price Index,
which measures price changes for repeat sales of single-family
homes in six metropolitan areas, showed overall prices were up
0.9 percent in August from July.
The rise, the fifth straight increase of 0.9 percent or
more, took overall prices to 5.4 percent above a year earlier
and pushed the index to a new high, confirming Canada's housing
market is still hot.
Defying global trends, the market continues to accelerate,
particularly in major cities such as Toronto and Vancouver.
Prices dipped during the recession, but bounced straight back
and have kept climbing since.
But weakness was evident elsewhere in the economy as
consumer confidence fell in October, the fifth decline in the
last six months, according to a report by the Conference Board
After a marginal increase last month, the Conference
Board's confidence index reversed course and declined 3.3
points to 71.8 in October, its lowest level since May 2009.
Just 19.9 percent of survey respondents indicated that they
expect their financial situation to improve over the next six
months, a decline of 3.9 percentage points.
"Currently, the difference between positive and negative
responses is at the lowest level since the country was in the
midst of the 2008-09 recession," the board said.
A separate report from Royal Bank of Canada also showed
that consumer confidence was far from buoyant as stock market
declines, gloomy global headlines, and a tepid economic
recovery in the United States dampened sentiment.
The quarterly RBC report showed 26 percent of respondents
anticipate that the national economy will improve over the next
year, down 16 points from the previous survey.
The overall index fell to 70 points, a drop of 24 points
from three months earlier.
"The drop in the RBC Canadian Consumer Outlook Index
reflects ongoing global economic uncertainty, showing that
strong Canadian economic fundamentals insulate us but do not
make us immune to the turmoil around the globe," Craig Wright,
senior vice-president and chief economist at RBC, said in the
"Given the uncertainty, the drop in the index was not
unexpected, though it was disappointing."
RBC now forecasts 2.4 percent growth for the Canadian
economy in 2011, down 0.8 percentage points from the bank's
Canada's central bank downgraded its outlook for the
economy and for inflation on Tuesday and suggested it will hold
official interest rates low for longer to stimulate economic
The Bank of Canada will provide further details on its
economic and monetary policy outlook later on Wednesday.