By Andrea Hopkins
TORONTO Jan 14 Canadian home resale prices
edged up in December and returned the Teranet-National Bank
Composite House Price Index to a record high after a decline the
The index, which measures price changes for repeat sales of
single-family homes, showed on Tuesday that national prices rose
0.1 percent last month from November. In November, they fell 0.1
percent from October.
The housing market cooled in 2012 after Canada's government
tightened mortgage rules due to worries that low interest rates
were prompting Canadians to take on too much debt.
While the sector bounced back in 2013, some signs of a
slowdown began to emerge in the final months of the year, with
building permits and housing starts falling and prices leveling
off amid speculation about rising mortgage rates and oversupply.
In December, resale prices were up 3.8 percent from a year
earlier after November's 3.4 percent year-on-year gain. The
Teranet index does not show actual prices.
For 2013 as a whole, the Teranet price index decelerated to
a 2.6 percent average gain, down from a 4.8 percent rise in 2012
and a 5.0 percent surge in 2011, noted Mazen Issa, senior Canada
macro strategist at TD Securities in Toronto.
"Despite the uptrend in home price appreciation in the
latter half of the year, we expect home prices to decelerate in
the year ahead, albeit modestly as monetary policy is expected
to stay accommodative for an extensive period of time," Issa
In October, the Bank of Canada dropped its policy tightening
bias, increasing expectations that official interest rates will
remain at historically low levels for longer than had been
thought. Still, mortgage rates are expected to rise gradually as
the U.S. Federal Reserve scales back its stimulative measures
and financial conditions gradually tighten around the world.
That is expected to dampen the rise in house prices in 2014,
and most economists say the market will have a soft landing from
its boom years rather than a U.S.-style crash.
But some are concerned that any big drop in house prices
would leave many indebted households under water.
The Teranet data showed that while overall prices rose in
the month, prices fell in December from the month before in
eight of 11 cities. Gains included a 0.6 percent rise in
Vancouver and Edmonton and a 0.4 percent rise in Toronto.
Prices fell 1.7 percent in Victoria, 1.2 percent in Halifax,
0.6 percent in Hamilton and Montreal, 0.4 percent in Quebec, 0.3
percent in Calgary and Ottawa, and 0.1 percent in Winnipeg.
Year-over-year price gains were seen in every market but
Victoria, where they were down 4.0 percent from December 2012.
Gains on the year were led by a 6.5 percent rise in Calgary,
a 5.5 percent rise in Vancouver and a 4.9 percent rise in
Toronto. Prices were up 3.7 percent in Hamilton, 3.6 percent in
Edmonton, 3.4 percent in Winnipeg, 1.5 percent in Quebec, 1.0
percent in Ottawa and 0.4 percent in Halifax and Montreal.